Renting a spare room to travellers in the UK: the Rent a Room scheme explained
Under the UK's Rent a Room scheme, you can earn up to £7,500 a year tax-free from letting furnished accommodation in your only or main home, and that includes short-stay guests and bed and breakfast. If someone else also gets income from letting accommodation in the same property, the limit drops to £3,750. Below the limit you don't need to do anything; above it, you fill in a tax return and choose how you're taxed.
If you've got a spare room and you'd like it to pay for itself, hosting travellers is one way to do it. This guide covers the tax side for UK hosts, with the figures checked against GOV.UK and HMRC's own helpsheet in November 2026, and then the other things worth sorting before your first guest arrives.
Who can use the Rent a Room scheme
The scheme is for furnished accommodation in your only or main home (HMRC, HS223). You can use it whether or not you own your home, and GOV.UK says it also applies if you run a bed and breakfast or a guest house (GOV.UK). So a spare room let to travellers for a few nights at a time can qualify, as well as a longer-term lodger.
It doesn't cover a home that's been converted into separate flats, or a place that isn't your main home when you let it.
What counts towards the £7,500
The limit applies to your gross receipts for the tax year, which runs from 6 April to 5 April. Gross means everything guests pay you, not your profit. HMRC says that includes "amounts you receive for meals, goods and services, such as cleaning or laundry" (HMRC, HS223). So if you offer breakfast, the breakfast money counts too.
A worked example
Say you let your spare room at £45 a night and host guests for 100 nights in the tax year, and half of them add breakfast at £8 each.
Room: 100 × £45 = £4,500
Breakfast: 50 × £8 = £400
Gross receipts: £4,900
That's under £7,500, so it's tax-free and you don't need to tell HMRC. One caution: if someone else, such as a partner who co-owns the home, also receives income from letting in the same property, the limit falls to £3,750, and each of you should check how the rule applies to your own receipts.
These numbers are only an illustration. What you can charge depends on where you live and what you offer.
If you earn more than £7,500
If your gross receipts go over the limit that applies to you, you need to report the income on a Self Assessment tax return. There are two ways of working out the taxable amount (HMRC, HS223):
Method A: you pay tax on your actual profit, deducting your expenses in the normal way. HMRC uses this one automatically.
Method B: you pay tax on the amount your gross receipts go over the limit, with no expenses deducted.
To use Method B instead, you have to tell HMRC within the time limit: one year from 31 January following the end of the tax year. Method B can work out better if your costs are low; Method A if they're high, or if you've made a loss.
You can also opt out of the scheme even below the limit, which is usually only worth it if you've made a loss.
Before your first guest: other things to check
Tax is only part of it.
Your mortgage or tenancy. If you have a mortgage or rent your home, your agreement may have rules about letting rooms, so read it and ask if you're unsure.
Your home insurance. Tell your insurer you'll have paying guests. Paying guests can affect your cover.
Scotland. Many lets to guests who stay temporarily need a short-term let licence from the council, and operating without one when you need it is a criminal offence, with fines of up to £2,500 (mygov.scot). Whether your spare room needs one depends on your circumstances, so check with the mygov.scot licence checker or your council.
Elsewhere in the UK. Rules on short stays differ between nations and councils, so check with yours.
Safety. As a resident landlord you're responsible for keeping your home safe and in good repair (GOV.UK).
Hosting on Among Our People
On Stay with a local, LGBTQ+ travellers book a room in your home. You set your own price and decide whether to offer breakfast and instant booking. We don't take a commission on your bookings. Instead there's a small fixed listing fee: free while our launch offer runs, once your profile is complete, and after that still free to list, with nothing to pay until your first enquiry, then £99 a year or £10 a month. Prices and the launch offer were checked on 5 November 2026 and can change, so see the current terms when you list your room.
If you're new to hosting, our guide to what a homestay is shows what guests expect, and our guide to gay bed and breakfast covers what to put in your listing about breakfast.
Questions people ask
Can I use the Rent a Room scheme for Airbnb or short-stay guests? Yes, if it's furnished accommodation in your only or main home. GOV.UK says the scheme also covers running a bed and breakfast or guest house. It doesn't matter which website the booking comes through.
Do I need to tell HMRC if I earn under £7,500? No. Below the limit you're automatically exempt and don't need to do anything, unless you want to opt out.
Does breakfast count towards the £7,500? Yes. Money for meals and services such as cleaning or laundry is part of your gross receipts.
Can I use it if I rent my home rather than own it? Yes, the scheme applies whether or not you own your home, but check your tenancy agreement allows you to let rooms.
What if two of us share the income? If someone else also receives income from letting in the same property, the limit drops from £7,500 to £3,750. Each of you should check how that applies to your own receipts, and HMRC's helpsheet HS223 explains it in detail.
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General information, not tax advice. Tax rules change, so check GOV.UK or speak to an accountant about your own situation.