Enter Your E-mail

The rules of the ‘Rent-A-Room’ relief scheme enable the landlord to prepare the usual income and expenditure accounts and then compare the actual expenses incurred with the Rent-A-Room relief. He can then claim whichever is more beneficial.

The comparison can be made year on year and changed to cater for whichever gives the better result.
A landlord has up to one year after 31 January following the end of the tax year to decide which option to use.

Example:

In the second year of renting Julie received the same gross amount of £5,000 but incurred costs of £6,000, producing a loss of £(1,000).

Clearly for this year it would be more beneficial to prepare normal property income and expense accounts claiming the loss.

The loss can generally be claimed against other property income – or carried forward and offset against future net profits.