ENQUIRY: RENT A ROOM SCHEME

Antithermal1723

Hello,

I have finally settled into my house after a long delay. My friend will be moving into my spare bedroom and I've read up that I can claim relief of £7.5k tax free from lodging per tax annum. My friend will be moving on the 10th of November and will be paying £675 for rent w/utilities included. I am aware that the tax year ends at the beginning of April. So from now till the end of the tax year, I would be receiving £4,050 from my friend which is under the allowed maximum tax relief amount. 

Do I need to let HMRC know that I will be opting into the rent a room scheme? 

Also if I was to continue charging £675 for 12 months after the new tax year, I would be over the allowed tax relief (£8100), I read somewhere that I only pay 20% of the excess (£600) for the first time then the full excess the following year. Is that correct?

Any advice is appreciated, thank you for reading. 

singhini

When i did this anumber of years ago i never told HMRC as i too was under the £7,500 annual threshold. 

In the year it did go over £7,500 i did self assessment and selected to "op into" the "rent a room scheme" i.e. the simpler system where the first £7,500 is tax free and your marginal rate of tax is charged on the amount above.

Here's a GOV link that you might find useful HS223 Rent a Room Scheme (2025) - GOV.UK

I think there used to be something about certain spaces in the house had to be shared i.e. both you and the lodger share the kitchen, the living room, perhaps a bathroom but i didn't see anything mentioned on the link i just provided above (so perhaps im wrong). 

in the link and under where it says "time limit" it states You must let HMRC know within one year of 31 January following the end of the tax year if you

So im guessing for 2025/26 tax year (6 April 2025 – 5 April 2026), the filing deadline is 31 January 2027

Albermarle

I think there used to be something about certain spaces in the house had to be shared i.e. both you and the lodger share the kitchen, the living room, perhaps a bathroom but i didn't see anything mentioned on the link i just provided above (so perhaps im wrong). 

I think you just have to follow the general rules that defines having a lodger in the house.
No lock on the bedroom door, sharing facilities etc.