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Flatshare website www.spareroom.co.uk has teamed up with homelessness charity Shelter to launch a campaign urging the government to raise the Rent-A-Room tax-free threshold.

The Rent-A-Room Scheme currently allows homeowners to earn tax-free income to a maximum of £4,250 per annum from letting furnished rooms to lodgers. But that threshold is now almost £1,350 below the average room rent in the UK which stands at £5,593 per year, and a substantial £3,417 under the average London room rent.

SpareRoom wants the threshold raised to £7,500 and for future annual increases to be linked to inflation.

The site says that if the current threshold - unaltered since 1997 - had risen in line with inflation, the allowance would now be at least £6,500. This is still considerably below average London room rents which, in 17 years, have increased by around 103 per cent.

SpareRoom claims that there are now no areas of the capital with average rents of under £4,250 per year - the equivalent of £354 per month. Even across the rest of the UK, only one third of rooms rent for less than that limit.

You would have to go back to 2009 to find a London postcode district with average rents of under £4,250 per year; even then it was only one postcode, E12, according to SpareRoom's research.

Comments

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    Waste of time - why do you think the Treasury has never increased the benefit in kind allowance from 8500 which it was set at I think around 1980

    • 11 February 2014 09:19 AM
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