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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I've been renting out my spare rooms on Airbnb for several

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I've been renting out my spare rooms on Airbnb for several months, and business is picking up, enough to meet my basic needs. But its still very low income and is my only source of income. I've just registered with HMRC to start filling in tax returns as a sole trader, as i believe i'm obliged to do so though the sums involved are - i believe - way below the threshold of having to pay any tax. But I'm rather confused by two things 1) The "rent a room" scheme has a threshold of £7500 before you need to pay tax and says if you don't reach that level (which i haven't) then "you don't need to do anything". Does this mean I don't need to register and submit a tax return after all? Do I literally do nothing? 2)If I do have to submit tax returns do the allowable deductions listed on the HMRC site for renting out property - such as council tax and utility bills - apply to the airbnb situation whereby i'm merely renting out rooms on a temporary basis in my own home? And if so do I deduct the whole of those costs or only a percentage?

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Hi

You are not self employed or a sole trader but just a receiver of rental income so yes you have two choices as you rent out rooms within a home you continue to reside in

If the rents you receive are less than £7500 a year then you can claim exemption under that factor, but if your rents are more then you can claim the rents received less expenses, and the expenses would be a percentage of the running costs of the home plus direct costs for renting out specific rooms

But either way you still need to complete a tax return each year to advsie HMRC of the situation

Let me know if I can assist further

Thanks

Sam

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