Rent-a-room relief (UK, 2025–26)
For 2025–26, rent-a-room relief may apply to gross receipts from furnished accommodation in the individual’s only or main home. The annual limit is £7,500, reduced to £3,750 where another person also receives income from letting accommodation in the same property. If receipts exceed the limit, an eligible person may choose the scheme’s excess-receipts method or compute actual profit under the ordinary rules, subject to the conditions.
Worked example
A sole qualifying landlord receives £9,000 gross receipts from a furnished room in their main home in 2025–26. If they choose the rent-a-room excess method and all conditions are met, taxable receipts under that method are £9,000 − £7,500 = £1,500; expenses are not separately deducted under that method.
Common mistake
Deducting actual expenses as well as the £7,500 limit when using the excess-receipts method.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |