Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what his policy is on increasing rent-a-room tax relief in line with RPI on an annual basis.

Rent a Room relief has been a feature of the income tax system since 1992.

In 2016, the threshold was raised to give an income tax exemption on income of up to £7,500 for individuals who let furnished accommodation in their only or main residence. This aligns with the Government’s objectives of supporting living standards and increasing the availability of low-cost housing. It also reduces and simplifies the tax and administration burden for those affected and has taken some taxpayers out of Self-Assessment entirely.

The Government consulted on the scheme in 2018. The response to this showed there to be a consensus that the relief at the current level provides an effective incentive for people to make spare rooms available for rent.

In addition, the Government does not have evidence that increasing the Rent a Room threshold above £7,500 would further encourage spare rooms to be made available for rent. At present, the Government believes that the threshold is set at an appropriate level.

As with all tax policy, the Government keeps this relief under review.