With most of the hotels and accommodation fully booked in the lead up to the 2012 Olympic Games, renting out a room may seem like a good business investment. However, HM Revenue & Customs warn individuals to seek advice to avoid falling foul of legislation.
As approximately 500 days remain before the start of the Olympic Games, attention is being turned to accommodation for visitors which is mostly fully booked. Renting out a spare room in your home will generate income, which is tax free up to £4,250 per year. There are strict conditions which have to be met, in order to avoid a penalty from HMRC.
A room that is furnished, or the floor of a house, can be let to a lodger who has occasional use of family rooms. Meals may be provided as part of the lodgings, in return for payment. If you rent your home you can still rent a room to a lodger, as long as the room is furnished. A house that has been converted into flats or self-contained units isn’t eligible under the Rent a Room scheme, and will be subject to tax at the present rates. A room which is unfurnished, although it may be part of your home, is not eligible under the scheme.
For anyone considering renting out rooms during the 2012 Olympic Games, or any other time, seek the advice of a low cost accountants firm to ensure that you comply with the relevant legislation. Online accountants are easier to contact and happy to provide advice for anyone setting up a business or looking to generate extra income.
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