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Posted Wed, 21 Feb 2024 10:20:46 GMT by alfo926
If I rent a room in my home for £500/mo, thus falling within the £7,500 Rent-a-Room allowance, would I need to include that rental income in the calculation of my Adjusted Net Income, for purposes of reducing my Personal Allowance above £100,000? Also, what would be the situation if I was charging £800/mo and thus exceeding the Rent-a-Room allowance?
Posted Fri, 23 Feb 2024 08:46:02 GMT by HMRC Admin 25
Hi alfo926,
If you are below the threshold then it's non taxable and you do not need to include.
if you went above the £7500 threshold then you would need to include the taxable profit. 
Thank you. 
Posted Sat, 24 Feb 2024 08:40:29 GMT by alfo926
Thank you for your reply. Just so I can be entirely clear on my reporting obligations: 1. If the total I receive is £7,500 or less I do not need to declare the income at all to HMRC, and it does not form part of my adjusted net income. 2. If the total I receive is greater than £7,500 I must declare the full amount to HMRC, and the full amount is included in my adjusted net income. Is my understanding correct?
Posted Sat, 24 Feb 2024 08:42:07 GMT by alfo926
As a follow-up, when you say "taxable profit" do you just mean the amount above £7,500? In which case the amount included in my adjusted net income is the total income MINUS the £7,500 allowance?
Posted Tue, 27 Feb 2024 10:41:34 GMT by HMRC Admin 32

Yes, that would be correct.

The taxable profit would be your net income.

If you are using the exemption amount £7500 to calculate your taxable income then yes it would be the gross income minus the exemption amount.

Rent a room in your home

Thank you.
Posted Tue, 27 Feb 2024 11:08:45 GMT by sw2048
A question related to this: during the current tax year I started hosting foreign students for short periods (my total income from it will be well below £7,500). As I already complete a tax return every year, do I need to opt into the Rent a Room Scheme, or simply "ignore" the income and complete my return as in previous years?
Posted Tue, 27 Feb 2024 16:01:07 GMT by HMRC Admin 10
You need to include it on the return but specify by ticking the box on the rental section that you are claiming rent a room relief.

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