Rent a Room Scheme calculator (£7,500 tax-free)
For lodgers or guests in your own home. Enter what you receive and your costs to see if you owe any tax.
How the Rent a Room Scheme works
You can earn up to £7,500 a year tax-free from letting furnished accommodation in your only or main home, for example to a lodger or as a holiday let while you live there. It halves to £3,750 if someone else, like a joint owner, also gets income from letting in the same home. Under the limit it's automatic. Over it, you must send a tax return, and you can choose to pay tax on either your receipts minus the £7,500 (with no expenses), or your actual profit.
When it doesn't apply
- The room isn't in your main home when you let it, or you let your home while you live abroad.
- The accommodation isn't furnished.
- It's used as an office or for business (a lodger working there in the evenings, or a student studying, is fine).
- Letting a whole separate property: use the normal property rules instead.
Worked examples
1. Lodger, £6,000 a year: Under £7,500, so it's tax-free: £0.00.
2. Lodger, £9,000 rent, £1,500 costs: The allowance gives £1,500 taxable, actual profit would be £7,500, so the allowance wins: £300.00 tax at 20%.
3. Big costs, £9,000 rent and £8,500 costs: Actual profit is £500, lower than the £1,500 the allowance would leave, so actual profit is used: £100.00 tax.
Earning from other things too, like selling or odd jobs? Try the side hustle tax calculator.
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CIS rates, overtime maths, tax dates, mileage, VAT and late payment, on 2 pages. Keep it on your phone or print it for the van.
Frequently asked questions
How much can I earn tax-free renting a room?
Up to £7,500 a year under the Rent a Room Scheme, or £3,750 if the income is shared with someone else letting in the same home.
Do I need to tell HMRC about a lodger?
Not if your receipts are £7,500 or less (or £3,750 shared): the exemption is automatic. Over that, you must send a tax return.
Can I use Rent a Room for Airbnb?
Yes, if you let furnished accommodation in your only or main home. It doesn't cover a separate property you don't live in.
Can I claim expenses as well?
Not with the allowance. Over the limit you choose either receipts minus £7,500, or receipts minus actual expenses.
Sources
This guide is general information, not legal, tax or financial advice. Rules and rates change, so check the linked GOV.UK pages for the current position.