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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: UK Tax
Satisfied Customers: 4996
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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UK question on tax. I have rented out the top floor of my second

Customer Question

UK question on tax. I have rented out the top floor of my second home. My tenant pays me £500 a month. £50 a month is to cover their gas and electricity.
Do I just count it as taxable income together with a small income I get as a private tutor? I just add the two incomes together for the year?
Submitted: 2 years ago.
Category: UK Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.
You should separate the two incomes as one is income as self employed tutor and the second is income from property.
The Rent a Room Scheme lets you earn up to a threshold of £4,250 per year tax-free from letting out furnished accommodation in your home. More information on this can be found here.
https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme
In his latest Budget the Chancellor has increased rent-a-room relief to £7,500 wef 6 Apr 2016.
I hope this is helpful and answers your question.
If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 2 years ago.
As I stated this is not my main home but a second home, so rent-a-room relief does not apply.So if I must separate the rent income how does it relate to my tax free Personal Allwance?
Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your reply.
Income from all sources is aggregated and your personal allowance is set against that total income.
As an example
Income from self employment - £5,400
Rental income net of expenses - £5,400
Total income - £10,800
Personal allowance - £10,600
Taxable income - £200
Tax at 20% - £40
I hope this is helpful