If I earn more than £7,500 from rent-a-room but the excess of this together with my other income is less than my personal allowance of £12,570, is that still tax-free? Additionally, if I earn £7,000 interest from savings, which is £1,000 more than the combined £5,000 starting rate for savings and £1,000 personal savings allowance, is that £1,000 excess useable? Plus, I receive £500 dividends on top?  

For example, rent-a-room earning £11,000, work income is £6,000, savings interest is £7,000 and dividend £500. So rental income outside of rent-a-room scheme is £3,500 (£11,000 - £7500) + £6,000 work + £1,000 savings (£7,000-£6,000) + £500 = £11,000. That amount is still within the personal allowance of £12,570, so is this tax-free? 

Arthur Weller replies: 

Yes. Your non-savings, non-dividend (NSND) income is only £9,500, and your remaining personal allowance plus the 0% starting rate for savings, the £1,000 personal savings allowance and the £500 dividend allowance between them shelter all the other figures you gave, so no income tax is due (for 2024/25). NSND income is £9,500 from £3,500 excess property income (i.e., 11,000 - £7,500) plus £6,000 work income). After £9,500, NSND £3,070 of the personal allowance remains (i.e., £12,570 - £9,500). This can be set against the savings income of £7,000, leaving £3,930. This is covered by the £5,000 starting rate for savings. Dividends are always taxed last and, in your case, are covered by the £500 dividend allowance.