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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I summarize my situation: 1.-I rent a 3-bedroom property from

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I summarize my situation:
1.-I rent a 3-bedroom property from a landlord for 2,250 Pound/month;
2.-The existing tenancy agreement is between myself and the landlord;
3.-2 of the rooms are occupied by 2 of my friends;
4.-There are two contracts between my friends and myself, so the two rooms are sublet to them;
5.-They pay me a total of 1,700 Pounds which means that I make no profit on this;
6.-I understand that I need to declare nothing to the HMR as I make no profit at all

1.-Do I need to make any kind of statement for the money I am receiving from my two friends?


Read about rent a room relief and letting property generally here and here. You would not want to claim to be taxed this way as you would be taxed on £20,400 (£1,700 x 12) less the rent a room allowance of £4,250. No expenses or any part of the rent you pay the landlord would be deductible

You should register for self-assessment using a Form SA1. In a full tax year, you will declare income of £20,400 less that part of the rent your landlord you pay that can be reasonablt applied to the two rooms you let. You would probably do that based on the size of the rooms.

You cannot offset that part of the rent that applies to your room against the rent you receive from your friends. That would mean other taxpayers would effectively be subsidising your personal rental costs. You may be able to claim some of the running costs such as those incurred for heat and light and for the cost of any services you provide to your friends. Take a look here for more information on expenses.

I hope this helps. Let me know if you have any further questions.

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