UK Rent a Room Scheme Calculator
Earn up to £7,500 tax-free from a lodger in your main home. Compare the Rent a Room scheme's flat allowance against deducting your actual expenses to find the lower tax bill.
Total rent charged to the lodger, including any amounts for meals, cleaning or utilities.
Apportioned share of bills, repairs, wear-and-tear. Only relevant for the standard method.
Standard method tax
£1,700
Profit £8,500 × your rate
Rent a Room scheme tax
£300
(Receipts − £7,500) × your rate
Best method — use the scheme
£1,400 saved
vs the other option
The Rent a Room scheme saves you £1,400 over the standard method because the £7,500 tax-free slice exceeds your actual expenses.
Elect the scheme annually on your Self Assessment return (UK Property pages, Rent a Room section).
Rent a Room applies only to letting furnished accommodation in your only or main home. It cannot be used for self-contained flats, office space, or when the home is not your residence.
Threshold: £7,500/year tax-free gross rental income when letting furnished accommodation in your only or main home. Halved to £3,750 if receipts are shared with another person.
Method A (standard): Declare rental profit (receipts − allowable expenses) and pay tax at your marginal rate. Best when expenses exceed £7,500.
Method B (Rent a Room scheme): Pay tax on receipts above £7,500 only, with no expenses deductible. Elected annually on the UK Property pages of your SA return. Best when your actual expenses are small.
When it doesn't apply: Self-contained flats, office-only space, any letting of a property that isn't your main residence, or letting during a period when you aren't living there (e.g. letting while abroad).
Sources: HMRC HS223 Rent a Room Scheme, ITTOIA 2005 ss784–802. Threshold unchanged since April 2016.
When each method wins
| Scenario | Recommended method |
|---|---|
| Receipts ≤ £7,500 | Automatic exemption — no election needed |
| Receipts > £7,500, low expenses | Rent a Room scheme |
| Receipts > £7,500, expenses > £7,500 | Standard profit method |
| Making a rental loss | Standard method — carries loss forward against future rental profits |
Frequently asked questions
How much can I earn tax-free from a lodger?
Up to £7,500 per tax year under the Rent a Room scheme — from letting a furnished room in your only or main home. Halved to £3,750 if you share receipts with another person.
Do I need to declare lodger income under £7,500?
No — the exemption applies automatically. You only need to report the income if you already file a Self Assessment return (then tick the Rent a Room box on the UK Property pages).
Should I use the scheme or claim actual expenses?
Use the scheme when your allowable expenses are less than £7,500. Use the standard method when expenses exceed £7,500. You decide each year on your SA return.
Does Airbnb qualify?
Yes, if the let is in your only or main home and the accommodation is furnished. Short-term lets via Airbnb qualify while the property remains your residence.
Can I claim expenses under the Rent a Room scheme?
No. The scheme gives you the £7,500 flat slice instead of deducting expenses. If you want to deduct actual expenses, use the standard profit method.