Property owners serving the demand generated by the London Olympic Games have received a somber warning from the British Tax body (HMRC) Her Majesty Revenue & Customs.
The Games come to London in 2012 and with them bring millions of foreign
visitors. And, these visitors will
be looking for accommodation during their visit. Many London home owners are now considering renting their homes to make some extra cash
A large number of property
letting websites are encouraging homeowners to rent their homes during the
Games. And, many of you are likely
to be lured by the opportunity to make some additional money. But what about the tax implications of
renting out your home? Our guide
explains more.
HMRC monitoring rental websites to check income being declared
Olympic events are taking place across
the country including London, Windsor and Weymouth. If you live in one of these areas you may be
considering letting out your home.
However, a leading accountant is warning that you could end up facing
large penalties if you donââ¬â¢t pay the tax on this income.
And, if youââ¬â¢re planning to use a
website to let your home, you could be leading HM Revenue and Customs (HMRC) to
your door.
Nick Parker of RSM Tenon said:
ââ¬ÅHMRC actively monitor rental accommodation websites and adverts during major
events, and we suspect they will be more vigilant than ever during the
Olympics.ââ¬Â
Rent a Room scheme allow some untaxed income
Under the HMRCââ¬â¢s Rent a Room
Scheme, you can receive up to ã4,250 a year tax-free for letting a furnished
room. That would equate to around
ã1,000-ã2,000 per week for the Olympic period.
However, if you are considering
offering visitors additional services such as laundry or providing meals, these
will need to be added to the rental payments received.
And, if you have received more
than ã4,250, youââ¬â¢ll need to declare it to HMRC. If you move out of your home and let it in its entirety, you
may also have to pay tax on this rental income.
