You must keep a record of this income even if it is not liable to tax.
Property allowance
If you own a property jointly with others, you are each eligible for the £1,000 allowance against your share of the gross rental income. If you opt to use the allowance, you will not be able to claim any loss or deduction for property expenses.
You can choose whether or not to use the property allowance for each tax year separately, as each election applies only for that tax year.
Please note that you cannot claim the allowance on income from letting your own home under the Rent a Room Scheme.
Rent a Room Scheme
The Rent a Room Scheme lets you earn up to £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else. HMRC believe that the relief is being abused by some taxpayers so with effect from April 2019, it is proposed that the taxpayer must also reside in the property for which relief is claimed. This is subject to Finance Bill (no.3) 2019 receiving Royal Assent in March 2019.
Trading allowance
The trading allowance is a tax exemption of up to £1,000 a year for individuals with income from self-employment (but not a partnership), casual services (for example, babysitting or gardening), or hiring out personal equipment such as power tools.
If you have more than one type of trading or miscellaneous income, you can still only claim one trading allowance, but you can choose how to allocate it between income sources.
As with the property allowance, the £1,000 allowance is claimed instead of actual expenses and cannot create or increase a loss.
