Rent-a-room and tax deductions

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    Rent-a-room and tax deductions

    Trying to settle a debate :-

    I am aware that claiming rent-a-room relief precludes the deduction of expenses for that property such as utilities, GSC, etc.

    However, my accountant has stated that I cannot deduct an amount for use of my own property for business purposes, since I am claiming rent-a-room relief. I am dubious about this. To me, this is a business cost, not a property cost.

    As a hypothetical example, say I ran a web design business from home, and I let a room under the rent-a-room scheme. If I claimed rent-a-room relief, would this prevent me from making a tax deduction from my web design income for the use of my home for business purposes?
    There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

    #2
    The point of the Rent a Room scheme is that the landlord isn't running a business, it's a non-commercial arrangement.
    So you aren't using part of your property for running a business unless you have another business (like a web design business).
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      I am not suggesting that Rent-a-Room is a business (...and that is, I guess, part of the point of my question).

      I am aware that claiming rent-a-room relief precludes the deduction of expenses for that property such as utilities, GSC, etc. However, my understanding/assumption is that this remains separate from any business that the householder may operate from home. I would not expect rent-a-room to impact the finances of such a business.

      Say I ran a web design business from home, and I also let a room there under the rent-a-room scheme. If I claimed rent-a-room relief, would this prevent me from making a tax deduction from my web design income for the use of my home for business purposes?
      There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

      Comment


        #4
        The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else. You can let out as much of your home as you want.

        So your web design business wants to rent a a room in your house and volunteers to pay £7500 to rent a room. So your business will make £7500 less profit and you get the money tax free , under rent-a-room scheme. What a clever idea !

        Comment


          #5
          Originally posted by doobrey View Post
          Say I ran a web design business from home, and I also let a room there under the rent-a-room scheme. If I claimed rent-a-room relief, would this prevent me from making a tax deduction from my web design income for the use of my home for business purposes?
          No, I believe you would be able to claim an allowance of £4 a week against the income from that business.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            Originally posted by jpkeates View Post
            No, I believe you would be able to claim an allowance of £4 a week against the income from that business.
            Thanks. That is what I thought.
            There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

            Comment

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