Last year HMRC carried out a review of “rent a room” relief, especially at Airbnb Landlords. It proposed that the availability of this generous relief should be restricted to situations where the taxpayer was resident for at least part of the time when the “lodger” was paying rent. The scheme currently exempts from tax gross rents up to £7,500 where rooms within the taxpayers’ main residence are rented out.
HMRC were concerned that the “rent a room” relief was being “abused” by letting out the entire property using websites such as Airbnb, and living elsewhere temporarily whilst the tenants were in the property. For example, renting out a house in south London during Wimbledon fortnight and potentially receiving up to £7,500 tax-free.
Note that the Autumn Budget announced that the proposed restriction is no longer being introduced.
May 9th, 2019