Instead of claiming for expenses you have incurred against rental income, you can instead claim the £1,000 property allowance. If you’re renting out property jointly with your spouse, each of you can claim this £1,000 allowance. It comes in useful when your actual expenses are less than £1,000. Instead, claim this allowance.
For example, if you were to rent out a driveway for parking and had annual rental income of £1,500, you could claim the property allowance, despite the fact that you probably incurred very few, if any costs. You’d then only have to pay tax on the remaining £500. If your income from renting the driveway was exactly £1,000 or less, you’d pay no tax at all by offsetting the £1,000 property allowance against it.
This allowance cannot be used against any amounts received from:
- An employer, or a spouse/civil partner’s employer
- A partnership in which you (or a connected party) are a partner
- A ‘close’ company in which you (or an associate) are a participator (so, for example, relief can’t be claimed where a director charges their company rent for use of their home – or driveway!) A ‘close’ company is one controlled by five or fewer shareholders
Take a look at this article to see how much people are earning from renting out their driveway.
So, if you fancy this as a side hustle, let us know (it needs to go on your tax return) and we’ll make use of the property allowance for you!
