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Advice required on the tax treatment of income from paying guests.
My client and his wife jointly own a large property and have started to let out rooms through a well-known online lettings website. They are now receiving a substantial level of income from this and I should be grateful for Taxation readers’ thoughts on the tax treatment and implications.
As I understand it there is a spare bedroom that is let with paying guests having the use of the home’s main bathroom and kitchen facilities. There is also a self-contained ‘granny flat’ consisting of a main room with a bed a shower room and a small kitchen.
Originally it was thought that the income would not exceed the rent-a-room limit but this is no longer the case.
Can Taxation readers advise on the heading under which this income should be declared and the expenses that might be allowable? I am wondering whether there might be any advantage in this...
