The Rent a Room Scheme is a UK government initiative that allows individuals to earn tax-free income from renting out a furnished room in their home. The scheme applies to people who rent out a room in their main residence to a lodger, and it can be used by homeowners, tenants, and people who run bed and breakfasts or guesthouses.

Under the scheme, individuals can earn up to £7,500 per year tax-free from renting out a room. This means that they do not have to pay any income tax on the first £7,500 of rental income they receive, regardless of their total income. If the rental income exceeds £7,500 per year, the individual will need to complete a tax return and pay tax on the excess amount.

To qualify for the Rent a Room Scheme, the room must be furnished and used as the individual's main residence. The scheme does not apply to renting out an entire property or to short-term rentals through platforms like Airbnb. It's also important to check with your mortgage lender or landlord to ensure that you are allowed to rent out a room.

The Rent a Room Scheme can be a good way for individuals to earn extra income from their home, and it can also be helpful for people who are looking for affordable accommodation. However, it's important to keep in mind that renting out a room can have implications for other taxes, such as Council Tax and Capital Gains Tax, so it's always a good idea to seek advice from a tax professional before participating in the scheme.