Rent a Room Scheme Calculator 2025-26
The Rent a Room Scheme lets you earn up to £7,500 per year tax-free from letting furnished accommodation in your own home — including Airbnb lets. Compare the scheme to standard deductions to see which saves you more tax.
How the Rent a Room Scheme works
Rent a Room — £30,000 salary, all rental income levels
Assumes 20% allowable expenses for standard rules comparison.
| Annual rental income | RARS tax (scheme) | Standard rules tax | Scheme saving | Best option | |
|---|---|---|---|---|---|
| £3,000 | £0 (exempt) | £480 | Save £480 | Use scheme | Details → |
| £4,000 | £0 (exempt) | £640 | Save £640 | Use scheme | Details → |
| £5,000 | £0 (exempt) | £800 | Save £800 | Use scheme | Details → |
| £6,000 | £0 (exempt) | £960 | Save £960 | Use scheme | Details → |
| £7,000 | £0 (exempt) | £1,120 | Save £1,120 | Use scheme | Details → |
| £7,500 | £0 (exempt) | £1,200 | Save £1,200 | Use scheme | Details → |
| £8,000 | £100 | £1,280 | Save £1,180 | Use scheme | Details → |
| £9,000 | £300 | £1,440 | Save £1,140 | Use scheme | Details → |
| £10,000 | £500 | £1,600 | Save £1,100 | Use scheme | Details → |
| £12,000 | £900 | £1,920 | Save £1,020 | Use scheme | Details → |
| £15,000 | £1,500 | £2,400 | Save £900 | Use scheme | Details → |
| £18,000 | £2,100 | £2,880 | Save £780 | Use scheme | Details → |
| £20,000 | £2,500 | £3,200 | Save £700 | Use scheme | Details → |
| £25,000 | £3,500 | £4,000 | Save £500 | Use scheme | Details → |
| £30,000 | £4,500 | £4,800 | Save £300 | Use scheme | Details → |
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When to use the Rent a Room Scheme
The Rent a Room Scheme (RARS) is almost always beneficial when your total rental income is below £7,500 — in that case, the entire income is tax-free and you don't even need to declare it on a Self Assessment return (unless HMRC asks). Once income exceeds £7,500, you pay tax only on the surplus above the threshold.
Standard deductions become advantageous only when your allowable expenses are very high relative to your income — for example, if you're paying a large portion of your mortgage interest, utilities, and repairs attributable to the tenant's room, and those costs exceed £7,500 per year. This is rare for a single room let.
Does the Rent a Room Scheme apply to Airbnb?
Yes — the Rent a Room Scheme applies to furnished accommodation in your own home, which includes short-term Airbnb-style lets as long as it's your main residence. If you let the whole property when you're away (and it's your only home), it also qualifies. However, if you own a separate buy-to-let property, standard rental income tax rules apply instead.
Rent a Room Scheme and Self Assessment
If your income is below £7,500, you can opt in to the scheme without filing a Self Assessment return — HMRC will automatically apply the relief. If your income exceeds £7,500, you must register for Self Assessment and include it on your return. You can choose which method (RARS or standard deductions) on your return each year — so you can switch if your expenses change.