Best to know the score before renting out your home during The Open

Fife residents renting out their homes ahead of The Open at St Andrews are being warned about potential financial penalties.

A record-breaking 290,000 people are expected to descend on Fife during the week of The Open, bringing an estimated £100 million benefit.

With just over two weeks to go before the championship gets under way, a range of properties remain available with business down on previous years.

However, those who are renting out their homes are being warned they could face “substantial” penalties if they do not notify HMRC.

Jenn Stewart, partner and head of the Dundee office at Johnston Carmichael, said: “It is important that the tax implications in doing so are not overlooked.

“The penalties for not reporting the income to HMRC can be substantial.

“Where an individual receives income from letting out a property, which can include their home, and the income before allowable expenses exceeds £10,000 or after deducting allowable expenses exceeds £2,500, there is a requirement to register and file a selfassessment tax return with HMRC.”

People had been asking for more than £30,000 to rent out their homes during the 150th Open.

With uptake slower than usual, most of the properties still advertised now appear to have more modest price tags but there are still properties available for the week for upwards of £15,000.

Lucy Crow, senior tax manager at Henderson Loggie, said rent-a-room relief will apply in some instances.

She said: “Any property, owned or rented, that has been your main residence during the year qualifies for rent-a-room relief of £7,500, or £3,750 each if the income is shared by more than one individual.

“If the income you receive is equal to or below the maximum relief, it is treated as exempt. Nothing needs to be reported to HMRC.

“However, any income in excess of this will need to be reported.”

Elizabeth Goldie, tax manager in the Dundee office of accountants EQ, said it is important people understand their obligations.

“The deadline for registering for selfassessment for the 2022/2023 tax year is October 5 2023.

“To submit the return, the deadline is October 31 2023 for paper returns and January 31 2024 for online returns.

“The tax due becomes payable by January 31 2024.

“Failure to register, report the profits and pay the associated tax liabilities could result in penalties and interest being levied.”

FINANCIALS: Jenn Stewart, of Johnston Carmichael, says there may be financial penalties for renting out your home.