With only around 500 days until the start of the 2012 Olympic Games at venues across the UK, people are being reminded that if they are thinking about renting out a spare room or their entire house, they need to check whether there's tax to pay.
In the run-up to the Games, HM Revenue & Customs (HMRC) will conduct free advice sessions around the country on renting out property. Places for all of the seminars need to be booked in advance on 0845 603 2691.
HMRC is reminding anyone thinking of renting out a spare room to visitors to check the Rent a Room Scheme first. Under the scheme, you can receive up to £4,250 a year tax-free if you rent out a furnished room in a residential property.
You can take advantage of the scheme if you let furnished accommodation - a room or an entire floor of your home - to a lodger who pays to live in your home, sometimes with meals provided, and who occasionally shares the family rooms. In addition, you can use the Rent a Room scheme if your home is rented; you don't have to be the owner.
The scheme does not apply, however, if your home is converted into separate flats that you rent out, if you let unfurnished rooms in your home, or if you let your whole home. In these cases you need to declare the rental income to HMRC and pay tax in the normal way.
Full details of the scheme can be found at http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804.
