''Rent a room'' scheme under attack

The government''s Rent a Room tax break has come under criticism this week because it has not risen in line with inflation, according to one property expert.

Tom Entwistle, from online community landlordzone.com, said that the amount which households are allowed to earn tax-free under the scheme "should be double what it is now" and is merely another stealth tax from the chancellor Gordon Brown.

Introduced in 1997, the Rent a Room scheme allowed households to earn £4,250 tax-free each year by having a tenant in their own home, but this amount has not risen for ten years.

Mr Entwistle said: "That allowance, in effect, if you took inflation into account, should be double what it was ten years ago.

"It is another of the chancellor''s stealth taxes they are just not increasing any allowances."

If you provide meals or laundry services for the lodger then you must add these extra payments charged to the rent and then the total sum may be eligible for tax.


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