Rent a Room Scheme Calculator
Find out how much of your lodger or homestay income falls under the tax-free Rent a Room allowance, and estimate any tax due on income above the threshold — comparing Rent a Room relief against claiming actual expenses.
Calculate Your Tax-Free Lodger Income
Enter your annual income from letting a furnished room in your home, along with any allowable expenses, to see which method leaves you better off.
Rent a Room Estimator
Compares Rent a Room relief against the actual expenses method.
How it Works
Understanding the Rent a Room Scheme
Check the Threshold
We compare your gross lodger income against the £7,500 tax-free threshold (£3,750 if you share the income with someone else).
Below the Threshold
If your income is at or under the threshold, it’s automatically tax-free and there’s usually nothing further to report.
Compare Two Methods
Above the threshold, we work out your taxable profit both ways: Rent a Room relief (income minus the threshold) and the standard method (income minus expenses).
Use the Better Result
We apply your marginal tax rate to whichever profit figure is lower, since HMRC lets you pick the method that leaves you better off.
Rent a Room Scheme FAQ
Answers to the most frequently asked questions about the UK Rent a Room Scheme and calculating tax on lodger income.
The Rent a Room Scheme is a UK tax relief that lets you earn up to a set amount each tax year, tax-free, from letting out furnished accommodation in your main home. It applies whether you own or rent your home, provided the room is furnished and the letting doesn’t count as a separate business such as a guest house.
You can earn up to £7,500 in a tax year before any tax is due. If you share the income with a partner or someone else in the property, each of you gets a threshold of £3,750. This limit includes any amount your lodger pays towards bills, meals, cleaning or laundry, not just rent.
If your gross rental income is below the threshold, you usually don’t need to do anything, even if you already complete a tax return. If it’s above the threshold, you must complete a tax return and either claim Rent a Room relief or deduct your actual expenses, whichever leaves you better off.
Yes. Once your income is above the threshold, you can choose between two methods: Rent a Room relief, where you’re taxed on income above the threshold with no expenses deducted, or the standard method, where you’re taxed on income minus your actual allowable expenses. HMRC lets you use whichever method results in the lower taxable profit.
No. Rent a Room relief only applies to letting furnished accommodation within your own main residence, such as a spare room to a lodger. It does not apply if the whole property is let out while you live elsewhere, or if the accommodation isn’t furnished.