Changes to the tax threshold on how much people can earn by renting out a spare room has made it a much more attractive proposition. The new rent a room tax allowance has increased to £7,500 per year, which means that since 6 April 2016 you can earn up to this amount before having to pay any tax. This is an increase of £3,250 on the previous tax threshold of £4,250.
If you do decide to opt into this new scheme, earning up to the maximum tax free allowance of £7,500 you can then record your earnings in your tax return under the property pages. If you would like to earn more than £7,500 you will need to complete a tax return.
If you would like to find out more about the benefits of renting out a spare room then why not pop into your local branch of Intercounty or call us on: 01279 655248.