Rent from a tenant isn’t just money in the bank. In the UK it’s property income, and HMRC expects you to report it accurately through Self Assessment. Getting it right means keeping rental money separate, claiming every allowable expense and filing on time. Here’s how reporting rental income works for UK landlords.
Do you need to report your rental income?
If your gross rental income (before expenses) is £1,000 or less in a tax year, the property allowance usually means you don’t need to tell HMRC. Above that, you’ll normally need to register for Self Assessment and report your rental profit each year.
You must report all rent you receive, whether it’s paid by bank transfer, cash or through a letting agent. HMRC also counts as rental income:
- advance rent and payments for ending a tenancy early
- bills the tenant pays that are your responsibility under the tenancy
- any part of a tenancy deposit you keep, for example for damage or unpaid rent
A deposit you hold in a tenancy deposit protection scheme and later return in full isn’t income.
Renting a room in your own home?
If you let a furnished room to a lodger in the home you live in, the Rent a Room Scheme lets you earn up to £7,500 a year tax-free (£3,750 each if you share the income with someone else).
How to report rental income on your tax return
Rental income goes on the UK property pages (SA105) of your Self Assessment tax return. You enter your total rents received, your allowable expenses and your finance costs, and HMRC works out the tax on your profit.
Your rental profit is added to your other income, such as wages or pensions, and taxed at your usual income tax rates. From April 2027, property income will have its own rates of 22%, 42% and 47%, two percentage points higher than now. Scottish and Welsh taxpayers should check how this applies to them.
Key dates
- 5 October: register for Self Assessment if this is your first year letting.
- 31 January: file your online return and pay any tax owed for the previous tax year (6 April to 5 April).
- 31 July: your second payment on account, if HMRC asks you to make them.
Most landlords with rental receipts of £150,000 or less use the cash basis automatically. That means you record income when you receive it and expenses when you pay them, which keeps things simple.
Allowable expenses you can claim
You can deduct expenses that are wholly and exclusively for letting the property, including:
- letting agent and property management fees
- landlord insurance
- repairs and maintenance, such as fixing a boiler or repainting between tenants
- utility bills, council tax and broadband, if you pay them rather than the tenant
- ground rent and service charges
- accountancy fees, legal fees for lettings of a year or less, and the cost of safety certificates
- travel to the property for letting purposes
- replacing furniture, appliances and furnishings like for like, through replacement of domestic items relief
Repairs versus improvements
A repair restores something to its original condition, such as replacing a broken window or a worn-out kitchen with a similar one. You can claim it against your rental income in the year you pay for it.
An improvement adds something new or better, such as an extension, a loft conversion or upgrading a basic kitchen to a luxury one. Improvements are capital costs. You can’t claim them against rent, but you can usually deduct them from your gain when you sell the property. Keep invoices that describe the work, not just the amount, so the right treatment can be applied.
Mortgage interest: the Section 24 rules
If you own residential property in your own name, you can’t deduct mortgage interest from your rental income. Instead, you get a tax credit of 20% of your finance costs, which rises to 22% from April 2027 in line with the new property basic rate. Higher-rate taxpayers therefore get less relief than the interest they actually pay, so it’s worth planning ahead.
Jointly owned property
If you own a property with your spouse or civil partner, rental income is normally split 50/50 for tax, even if you own it in different shares. If your ownership shares are genuinely unequal, you can ask HMRC to tax you on your actual shares by sending a declaration on Form 17.
Rental losses
If your expenses are more than your rent in a year, you have a rental loss. You can’t set it against your salary or other income, but it’s carried forward and used against future profits from your UK property business.
Holiday lets
The special furnished holiday lettings tax rules were abolished from April 2025. Holiday lets are now generally taxed in the same way as other residential lettings, so check how this affects your expenses and capital allowances.
Making Tax Digital for landlords
Rental income counts towards Making Tax Digital for Income Tax. If your gross income from property and self-employment combined is over £50,000, MTD applied from April 2026. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Under MTD you keep digital records and send HMRC quarterly updates.
Selling a rental property
When you sell a UK residential property that isn’t your home, you’ll usually pay Capital Gains Tax on the gain, at 18% or 24% depending on your income. You must report and pay within 60 days of completion, separately from your Self Assessment return.
Keep rental and personal money separate
Most reporting problems start long before the tax return. Use a separate bank account for rent and property costs, and keep tenancy agreements, invoices, mortgage statements, agent statements and insurance documents together. A quick monthly check is much easier than a rush in January.
If you live abroad, the Non-Resident Landlord Scheme may apply, and your letting agent or tenant may need to deduct tax from your rent.
Need help with your rental income?
Accountancy N Tax Services helps landlords across Wallington, Sutton, Croydon and the wider South London and Surrey area with their property income. We prepare your Self Assessment tax return, make sure you claim every allowable expense, and get you ready for Making Tax Digital. As an Accredited Certified Member in Public Practice of the Institute of Financial Accountants (IFA) with over 15 years’ experience, we make landlord tax simple.
Call 020 7112 9098 or email info@accountancyntax.co.uk. You can also read more about our self assessment tax return service and Making Tax Digital support.
This guide is general information based on the rules for the 2026/27 tax year and doesn’t replace personal advice.
