uktax.tools

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.

Your Lodger Income

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.

Best method — use the scheme

£1,400 saved

vs the other option

Standard method tax

£1,700

Profit £8,500 × your rate

Rent a Room scheme tax

£300

(Receipts − £7,500) × your rate

What to do

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 on your Self Assessment return (UK Property pages, Rent a Room section). Once made, the election continues automatically into later years — you don't need to re-elect every year — until you withdraw it or your gross receipts fall to or below the £7,500 limit, at which point it ends automatically (ITTOIA 2005 s800).

Elections and withdrawals must reach HMRC by 31 January 2029 for 2026-27 — the first anniversary of the normal 31 January 2028 Self Assessment filing date. This is not an extension of the filing deadline for your tax return itself.

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.

Share
Quick reference

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. Elect once on the UK Property pages of your SA return — the election then continues automatically into later years until you withdraw it or receipts fall to £7,500 (or £3,750 shared) or below, so you don't need to re-elect every year. Review annually whether it's still your best option; switching to the standard method counts as withdrawing it. 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?
Under the Rent a Room scheme you can earn up to £7,500 per tax year tax-free from letting a furnished room in your only or main home. The threshold is halved to £3,750 if you share the receipts with another person, such as a spouse or joint owner. The threshold has been frozen at £7,500 since April 2016.
Do I need to declare lodger income under £7,500?
No. If your gross receipts are at or below the Rent a Room threshold (£7,500 or £3,750 where receipts are shared), the exemption applies automatically and you don't need to tell HMRC. The only exception is if you already file a Self Assessment return for other reasons — in which case you simply tick the Rent a Room box on the UK Property pages.
Should I use the Rent a Room scheme or claim actual expenses?
Use the Rent a Room scheme when your allowable expenses are less than £7,500 — the scheme gives you a flat tax-free slice that's bigger than the expenses you could claim. Use the standard method (expenses) when your actual apportioned expenses exceed £7,500, because you'll reduce taxable profit more than the scheme allows. Compare the two methods each year you're over the threshold, since your best option can change as expenses move.
Do I need to re-elect the Rent a Room scheme every year?
No. Once you elect Method B (the Rent a Room scheme) on your Self Assessment return, the election carries on automatically into later tax years — you don't file a fresh election each year. It ends only when you withdraw it, or automatically once your gross receipts fall to or below the £7,500 (£3,750 shared) threshold. Switching to the standard method on a later return counts as withdrawing the election from that year onward (ITTOIA 2005 s800). This is different from the separate, one-off election to opt out of the automatic exemption below the threshold — for example to claim a loss — which does need to be made fresh for each year you want it to apply (ITTOIA 2005 s799).
What's the deadline to elect or withdraw from the Rent a Room scheme?
Elections and withdrawals must reach HMRC by the first anniversary of the normal Self Assessment filing date for the tax year in question (ITTOIA 2005 s800(5)). For example, for the 2025-26 tax year the normal online filing date is 31 January 2027, so the election or withdrawal deadline is 31 January 2028. This later date applies only to the Rent a Room election itself — it is not an extension of the deadline for filing your tax return.
Does the Rent a Room scheme apply to Airbnb?
Yes, provided the let is in your only or main home and the accommodation is furnished. Short-term lets through Airbnb or similar platforms qualify, but only while the property remains your residence. If you move out or let the whole property, the scheme no longer applies and the income becomes ordinary property income (or Furnished Holiday Let income if those conditions are met).
Can I claim expenses under the Rent a Room scheme?
No. Under the Rent a Room scheme you receive the £7,500 flat tax-free slice but cannot also deduct expenses. If you want to deduct actual expenses — apportioned utility bills, repairs, wear-and-tear — you must use the standard profit method. You choose the better of the two each year on your Self Assessment.

Sources

Most searched ↑↓ navigate · ⏎ open