Rent-a-room income
Rent a Room income is the money you earn from letting out furnished accommodation in your main home under the Rent a Room Scheme. For 2024/25 and 2025/26 you can usually earn up to £7,500 a year tax-free, or £3,750 each if you share the income with another owner.
From a possession point of view, Rent a Room income almost always comes from having a lodger in your own home. That normally makes you a resident landlord, and the occupier an excluded occupier/licensee, not an assured tenant. You still owe safety and anti-harassment duties, but you can usually end the arrangement by giving reasonable notice in line with the licence, without going to court for a possession order, very different from the full private rented sector under the Renters’ Rights Act.
However, labels are not everything. If what you call “Rent a Room” is actually a self-contained annex or granny flat used as the occupier’s only or main home, they may in law have an assured tenancy with full PRS rights and possession protections, and Rent a Room tax treatment may not be available.
Professional landlords using Rent a Room plan around both tax and possession status, ensuring the setup is genuinely a lodger arrangement and documenting notice terms clearly. Also see August's expenses feature.
Also see our landlord blog articles, including:
