Lodgers and income tax

[paultheknight]

If i earned £19000 p.a for renting out rooms in my house to lodgers and this was my sole income, would i be taxed?

The rent a room allowance is £7500 so take that off and I'm left with £11500, the tax free threshold. So can i assume there would be no tax?

Thanks

[jpkeates]

You'd need to talk to HMRC who will probably want you to complete an annual self assessment tax form.
But you are right about the tax treatment.

If you have more than two lodgers (or if you don't own your house) you might have an HMO which might be a separate issue.

[theartfullodger]

Aye:

You either have rental income from lodgers of less than £7.5k - in which case no tax - or more than £7.5k. If over, even by £1, you need to declare ALL the income (in your case £11.5k), and also all relevant expenses (eg insurance, cleaning etc etc etc..).

[paultheknight]

Great thanks for your help

[Gordon999]

If your gross receipts are more than the Rent-a-Room limit


If your gross receipts are more than £7,500 (or £3,750), you can choose how you want to work out your tax: Method A


You pay tax on your actual profit - your total receipts less any expenses and capital allowances. Method B


You pay tax on your gross receipts over the Rent-a-Room limit - that is, your gross receipts minus £7,500 (or £3,750). You can’t deduct any expenses or capital allowances if you choose this method.

HMRC will automatically use your actual profit (Method A) to work out your tax.

If you want to pay tax using Method B, you need to tell HMRC within the time limit. You will continue to pay tax on your gross receipts over the Rent-a-Room limit until you tell HMRC that you want to change back to paying tax on your actual profit (Method A).

If you pay tax using Method B, this automatically stops if your rental income drops below the £7,500 (or £3,750) limit.



Above information was copied from hmrc help sheet No HS223 :

https://www.gov.uk/government/public...om-scheme-2017

[theartfullodger]

Sorry, my bad , earlier post wrong, you need to declare ALL £19k. Getting old