Rent a Room Scheme

Treasury written question – answered at on 5 March 2025.

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Photo of Baroness Watkins of Tavistock Baroness Watkins of Tavistock Deputy Chairman of Committees, Deputy Speaker (Lords)

To ask His Majesty's Government what consideration they have given to raising the Rent a Room Scheme tax-free limit from £7,500 to account for rises in energy costs, council tax, and interest rates since the limit was last raised in 2016.

Photo of Lord Livermore Lord Livermore The Financial Secretary to the Treasury

The Rent a Room Scheme has been a feature of the income tax system since 1992.The current threshold provides an income tax exemption on income of up to £7,500 for individuals who let furnished accommodation in their only or main residence. This reduces and simplifies the tax and administration burden for those affected and has taken some taxpayers out of self-assessment entirely.

At present, the Government believes that the Rent a Room Scheme threshold is set at an appropriate level.

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