Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment his Department has made of the impact of the rent a room relief scheme on the supply of rooms for rent.

Rent a room relief provides an effective incentive for people to make spare rooms available for rent. It aligns with the Government’s objectives of supporting living standards, increasing the availability of low-cost housing, giving more choice to tenants, and making it easier for people to move around the country for work.

The relief also reduces and simplifies the tax and administration burden for those affected and has taken some taxpayers out of self-assessment entirely.

Landlords with income up to the threshold of £7,500 from renting rooms in their own homes (or £3,750 if let jointly) and who have no other property rental income are exempt from Income Tax on this income and do not need to declare it to HMRC.

Landlords with rent a room income above the threshold will declare the amount of income and pay tax on any income above the threshold. In these cases, rent a room income is amalgamated on the tax return with other property rental income in a landlord’s self-assessment return.

Landlords with rent a room income below the threshold who also have other property income to declare do not have to declare how much rental income they have that falls under the scheme. Instead, they simply tick a box to indicate that they are using the scheme.

HMRC publishes the estimated cost of the relief as part of its non-structural tax reliefs statistics (https://www.gov.uk/government/statistics/main-tax-expenditures-and-structural-reliefs).