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HMRC internal manual

Property Income Manual

Property allowance: contents: exclusions from relief: expenses deducted against rent-a-room receipts

No relief under the property allowance against relevant property income of an individual in a tax year if:

  • the individual has rent-a-room receipts below their individual limit (see PIM4020) but elects not to apply full rent-a-room relief (see PIM4050), or

  • the individual has rent-a-room receipts above their individual limit and does not elect to apply the alternative method of calculating profits (see PIM4030).

In both cases the individual would therefore be deducting actual expenses, which is consistent with the principle in PIM4438 that an individual cannot use the property allowance against one relevant property business, and deduct expenses as normal in calculating profits of another relevant property business.

For more info on rent-a-room scheme please see PIM4000 onwards.