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HMRC internal manual

Self Assessment Manual

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HM Revenue & Customs
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Returns: individuals returns: rent a room for traders

Main Tax Return (SA100)

The provision of accommodation in the taxpayer’s only or main home can sometimes amount to a trade, for example, if the taxpayer runs a guest house or a bed and breakfast business. This sort of income should not be included in the UK Property (SA105) pages of the return but instead included in the Self employment pages.

Help Sheet HS223 explains to the taxpayer how the Self employment pages should be completed to take account of the Rent a Room scheme. These cases can be identified by the entry ‘Rent a Room’ in the box asking for the description of the business.

If the taxpayers gross receipts (and balancing charges) are less than £4250, ‘Rent-a-Room’ is entered in box 1 (short pages) or box 2 (full pages) and the rest of the pages left blank.

If the taxpayer’s gross receipts (and balancing charges) are more than £4250, they should:

  • Enter a ‘Rent-a-Room’ in box 1 (short) or box 2 (full)
  • Fill in boxes 2 to 8 (short) or 1 to 10 (full) as appropriate
  • Enter the gross receipts (including services provided and balancing charges) in box 9 (short) or box 15 (full)
  • Enter £4250 in box 19 (short) or box 30 (full)
  • Enter any balancing charges in box 26 (short) or box 59 (full)

If the taxpayer’s gross receipts are £15000 or more, (including sums received for meals, goods and services but excluding any balancing charges), the gross receipts are entered in box 3.29. The Rent a Room exemption is then entered in box 3.63 and the net profit or loss in box 3.65. The taxpayer is told not to complete boxes 3.30 to 3.62 or boxes 3.66 to 3.72.

To enable the return to be processed using function CAPTURE RETURN it is necessary to take specific action to ensure the return can be processed automatically.

Short Tax Return (SA200)

The UK Property section should be completed to take account of the Rent a Room scheme, provided that UK property income was below £81,000.

If the taxpayer’s gross receipts from letting a furnished room, or rooms, in their own home are £4250 or less, they do not have to make any mention of this on the return.

If the taxpayer’s gross receipts from letting a furnished room, or rooms, in their own home are more than £4250, they can choose between

  • Declaring the excess over £4250, without deducting any expenses. The excess figure should be included in boxes 6.1 and 6.3

Or

  • Declaring the excess of rents over expenses. Total rents should be included in box 6.1, expenses in box 6.2, profit in box 6.3