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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I rented a room in my flat to a friend which was just to be

Resolved Question:

I rented a room in my flat to a friend which was just to be for a few months. However, buying her own flat took longer than anticipated so she stayed longer with me. She paid for room rent only but I believe I have gone over the tax allowance by £750 for the tax year 2014/15. I'm PAYE and my room will no longer be let so I will have no other income apart from salary. Can I make a one-off payment of £750 to HMRC? Many thanks Marie
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Marie, please advise if your friend stayed in your flat in the tax year 2013/14 or tax year 2014/15.

How much rent did you receive in total?

Many thanks
Customer: replied 2 years ago.
She stayed from Fef 14 and is leaving Jan 15. Her rent £500 per month inclusive. Now paid Jan and moves out 23/12015. From my bank statements I worked out I have received £5000
Hope this info you need
Marie
Expert:  taxadvisor.uk replied 2 years ago.
Marie, thank you for your prompt reply.

As your friend stayed with you over two different tax years, you should separate the rental income into these years .. 2013/14 say (500*2) = £1000 and for 2014/15 say £4,000.

Under rent-a-room scheme, provided you don't reveive more than £4,250 in a tax year your rent is treated tax free and there is no tax to pay.

You should however, declare this rental income to HMRC when completing/filing your tax return.

More information on this can be found on HMRC helpsheet hs223 here

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323577/hs223.pdf


If you were to report this income there would be no tax payable.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.
Thanks for helpful answer but I made a mistake!! She moved in in Feb 14 paying £500 per month. From 1/4/2014 (my new tax year) to Jan 2014 I received £5000 thus over the allowance by £750 for this tax year. Is this right and can I pay it off? Sorry for this.
M
Expert:  taxadvisor.uk replied 2 years ago.
Marie, thank you for your reply.

As you have received £750 more in this tax year, it would be reported in your tax year for tax year 2014/15 and payment relating to this tax year is not due till after 6 Apr 2015.

You could pay a payment in advance if you so wish or let them adjust your tax code to recover tax on £750 in the next tax year.

I hope thsi is helpful.
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Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes