Running a Bed & Breakfast business from your farmhouse can introduce some diversified income into the family and make use of some unused bedrooms.
Such an enterprise can also be tax-efficient. A farmhouse Bed & Breakfast business qualifies for the rent-a-room allowance, which has increased to £7,500 per annum from 6 April 2016. The allowance is halved if you share the income with your partner or someone else.
If you earn less than the threshold from your Bed & Breakfast lettings, the tax exemption is automatic and you do not need to do anything.
If you earn more than £7,500 per annum from your Bed & Breakfast lettings, you must complete a tax return and opt in to the scheme on the return to claim the allowance.
It should be noted that the Chancellor announced in the Spring Budget that the rent-a-room allowance would be examined further and we are likely to hear some more news on this shortly.
There are other factors that should be taken into account if setting up a new Bed & Breakfast enterprise for the first time, for example VAT. For further information on the rent-a-room allowance or setting up a Bed & Breakfast business in your farmhouse, please contact Ashley Smith on 01603 624181 or email email@example.com