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Posted Mon, 15 Jan 2024 00:15:26 GMT by
Hi, I am working through my self assessment tax return and have some questions. First some background: I am having a lodger that I rent out a room in my 2 bed flat to. I was planning to use the Rent a room scheme for the self assessment. I noticed that there is Box #44 - Residential property finance costs, which seems to imply that I can report my interest costs of my mortgage that I have for the property. Does this apply to me if I intend to us the rent a room scheme? If it doesn't, do I have a choice of reporting my income in a way where I can take my interest costs into account, and how do I calculate whether that different approach would be more advantageous to me than the rent a room scheme? I have read the docs online, but there aren't any clear examples that appear to be matching my scenario, so I wanted to ask if you could provide an example of to calculate the different approaches, assuming 13K GBP in rental income, and 12k in interests on the mortgage annually.
Posted Wed, 17 Jan 2024 13:04:25 GMT by HMRC Admin 8
If you are claiming the rent a room relief then you cannot claim any other expenses in relation to the rental as the £7500 should cover all expenses. if you wish to opt for actual expenses, you can only claim against the actual portion that the renting a room incurs.
So you cannot claim the full monthly costs for gas/electric/water/mortgage/council tax and any other costs. as such, in your scenatio, the £12000 interest would not be due and you would need to aportion your costs based on the size of the house (number of bedrooms/living room).

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