{"id":3937,"date":"2018-08-02T11:13:31","date_gmt":"2018-08-02T11:13:31","guid":{"rendered":"https:\/\/www.citylets.co.uk\/blog\/?p=3937"},"modified":"2020-12-18T11:13:50","modified_gmt":"2020-12-18T11:13:50","slug":"will-changes-to-rent-a-room-relief-deter-landlords","status":"publish","type":"post","link":"https:\/\/www.citylets.co.uk\/blog\/will-changes-to-rent-a-room-relief-deter-landlords\/","title":{"rendered":"Will Changes to Rent a Room Relief Deter Landlords?"},"content":{"rendered":"<p>Rent a room scheme allows individuals to earn up to \u00a37,500 a year tax free from renting out a spare room in their main or only residence.<\/p>\n<p>The relief was first introduced in 1992 with the intention of incentivising people to take in lodgers rather than rent out whole properties.<\/p>\n<h4><strong>Shared occupancy test<\/strong><\/h4>\n<p>Following on from a recent call for evidence that the rent a room scheme works as projected, the government decided to keep the relief at the current level, however, a new measure is to be introduced to help stop any abuse of the existing system \u2013 a shared occupancy test.<\/p>\n<p>This new test will require a landlord to be living and physically present in the property for all or part of the letting period, for the relief to apply. Those who don\u2019t satisfy this test, will no longer be eligible for the tax relief.<\/p>\n<p><a href=\"https:\/\/www.citylets.co.uk\/blog\/will-changes-to-rent-a-room-relief-deter-landlords\/test\/\" rel=\"attachment wp-att-3956\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-3956\" src=\"https:\/\/www.citylets.co.uk\/blog\/wp-content\/uploads\/2018\/08\/test.jpg\" alt=\"test\" width=\"732\" height=\"555\" srcset=\"https:\/\/www.citylets.co.uk\/blog\/wp-content\/uploads\/2018\/08\/test.jpg 950w, https:\/\/www.citylets.co.uk\/blog\/wp-content\/uploads\/2018\/08\/test-700x531.jpg 700w, https:\/\/www.citylets.co.uk\/blog\/wp-content\/uploads\/2018\/08\/test-400x303.jpg 400w, https:\/\/www.citylets.co.uk\/blog\/wp-content\/uploads\/2018\/08\/test-768x582.jpg 768w\" sizes=\"auto, (max-width: 732px) 100vw, 732px\" \/><\/a><\/p>\n<p>\u201cThe purpose of <a href=\"https:\/\/www.citylets.co.uk\/flatshare\/\" target=\"_blank\" rel=\"noopener noreferrer\">rent a room<\/a> relief has always been to support spare rooms, rather than whole properties, which should properly fall under the normal rules for taxing property income. A new shared occupancy clause will return the relief to its original purpose and clarify its role in the wider property tax regime\u201d, reads the consultation.<\/p>\n<h4><strong>Unnecessary burden for landlords<\/strong><\/h4>\n<p>However, according to the <a href=\"https:\/\/www.aat.org.uk\/\" target=\"_blank\" rel=\"noopener noreferrer\">Association of Accounting Technicians<\/a> (AAT), \u201cthis will add unnecessary complexity to the tax system\u201d and \u201cit\u2019s also likely to reduce accommodation availability and choice because many \u2018landlords\u2019 will simply choose not to rent out their spare rooms when they are not present,\u201d says Phil Hall, Head of Public Affairs &amp; Public Policy at AAT.<\/p>\n<p>He continues: \u201cMany will be forced to complete a self-assessment tax return when they otherwise wouldn\u2019t and many more will be required to laboriously keep records of when they were and weren\u2019t at home.\u201d<\/p>\n<h4><strong>A bulletproof test?<\/strong><\/h4>\n<p>It is not yet clear whether or how the shared occupancy can be proved but \u201cif no proof is required then the scheme will be open to widespread abuse. If proof is required, it\u2019s difficult to see exactly how shared occupancy can be proven in practice, especially when this may relate to irregular nights here and there,\u201d explains Hall, suggesting that HMRC have not properly thought that through.<\/p>\n<p><a href=\"https:\/\/www.citylets.co.uk\/mobile\/\" rel=\"attachment wp-att-2791\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-2791\" src=\"https:\/\/www.citylets.co.uk\/blog\/wp-content\/uploads\/2017\/05\/latest-apps.png\" alt=\"latest-apps\" width=\"618\" height=\"85\" srcset=\"https:\/\/www.citylets.co.uk\/blog\/wp-content\/uploads\/2017\/05\/latest-apps.png 618w, https:\/\/www.citylets.co.uk\/blog\/wp-content\/uploads\/2017\/05\/latest-apps-400x55.png 400w\" sizes=\"auto, (max-width: 618px) 100vw, 618px\" \/><\/a><\/p>\n<p>In his opinion, dropping these plans and allowing <a href=\"https:\/\/www.gov.uk\/rent-room-in-your-home\/the-rent-a-room-scheme\" target=\"_blank\" rel=\"noopener noreferrer\">rent a room relief<\/a> to continue \u201cas it has for over 25 years as a simple to administer, easy to understand tax relief that\u2019s available to all\u201d, would be a win-win for everyone.<\/p>\n<p>\u201cA shared occupancy test is a headache being created for what the Treasury\u2019s own analysis states will be a \u2018negligible\u2019 impact on tax receipts.\u201d<\/p>\n<p>The new legislation is due to come into force in April 2019 and will bring an end to the tax relief for those landlords renting their whole properties or spare rooms whilst they are away. They will be eligible for a much lower property allowance of \u00a31,000 instead.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Rent a room scheme allows individuals to earn up to \u00a37,500 a year tax free from renting out a spare room in their main or only residence. The relief was first introduced in 1992 with the intention of incentivising people to take in lodgers rather than rent out whole properties. Shared occupancy test Following on &#8230;<\/p>\n","protected":false},"author":1,"featured_media":3954,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[197,162,176],"tags":[452,449,453],"class_list":["post-3937","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-being-a-landlord","category-legal","category-legislation","tag-association-of-accounting-technicians","tag-rent-a-room-relief","tag-shared-occupancy-test","being-a-landlord","legal","legislation"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>Will Changes to Rent a Room Relief Deter Landlords? 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