Rent a room relief

Rent a room relief is a tax relief that lets you earn up to a set amount each year from Rent a Room income in your main home without paying income tax on it. It applies when you are a resident landlord taking in lodgers on a licence to occupy, not when you let a separate flat or annex on a full private tenancy.

Where the conditions are met, the first slice of your gross rental income from that room or rooms is tax-free. You choose between:

Using Rent a room relief, ignoring actual deductible expenses and simply claiming the allowance, or
Opting out and being taxed under normal Self Assessment rules on your rental business, deducting revenue expenses such as repairs and a share of bills.

Rent a room relief does not turn a lodger into an assured tenancy or reduce your housing-law duties. You still have to keep the home fit for human habitation, comply with fire and safety standards, and avoid harassment or unlawful eviction. Under the Renters’ Rights Act, the big divide is between genuine resident-landlord lodger arrangements, where possession is simpler and fully self-contained lets that fall into the mainstream Private Rented Sector (PRS) with full rental standards and possession grounds rules.