Self Assessment for Landlords UK

/Published:16th January 2026/inExpenses, Landlords, Running a business, Self Employed, Tax
Accounting Wise - Self Assessment Guide for Landlords UK

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If you earn money from renting out property in the UK, HM Revenue & Customs (HMRC) will usually expect you to declare that income through Self Assessment. While collecting rent may feel straightforward, the tax side often is not. Many landlords struggle with the finer details, such as what actually counts as taxable rental income, which expenses are genuinely allowable, how mortgage interest relief works under the current rules, and which deadlines can trigger penalties if missed.

This guide to Self Assessment for landlords in the UK is designed to remove that uncertainty. We break down the rules in plain English and explain not just what HMRC expects, but how those rules apply in real-life situations. From understanding furnished versus unfurnished property income, to avoiding common mistakes that lead to unexpected tax bills, everything is covered step by step.

Throughout the post, you will find practical examples, clear explanations of landlord tax changes, and links to official HMRC guidance so you can double-check the rules for your own situation. We also highlight common landlord pitfalls, such as under-declaring income, misunderstanding mortgage interest tax relief, or missing registration and filing deadlines.

Whether you are a first-time landlord or have managed rental property for years, this guide will help you file your Self Assessment return confidently, stay compliant with HMRC, and make sure you are not paying more tax than you need to.

1. Do landlords have to complete a Self Assessment tax return?

In most cases, yes. If you earn money from renting out property in the UK, HMRC will usually expect you to declare that income through a Self Assessment tax return.

The key threshold to be aware of is the £1,000 property allowance. This is a tax-free allowance that applies to gross property income, not profit.

The key “do I need to tell HMRC?” rule

  • £1,000 or less in gross property income: You may not need to report it, as it can be covered by the property allowance, provided you are eligible to use it.
  • More than £1,000 in gross property income: You will usually need to declare the income through Self Assessment.

HMRC confirms this approach in its official guidance on property income and the property allowance:

How landlords report rental income

Landlords report rental income using the SA105 (UK property) pages, which are submitted alongside the main Self Assessment tax return. This section is specifically designed to capture:

  • Rental income received during the tax year
  • Allowable property expenses
  • Any losses carried forward or used against other property income

HMRC provides a dedicated guide to help landlords complete the property pages correctly: How to fill in the UK property pages (SA105)

Registering for Self Assessment as a landlord

If you are not self-employed but need to declare property income, you normally register for Self Assessment using the SA1 registration route. This is common for employed individuals or retirees who start renting out property.

You can register online via HMRC here: Register for Self Assessment (SA1)

Tip for landlords: The £1,000 property allowance is optional. If your allowable expenses are higher than £1,000, it may be more tax-efficient to ignore the allowance and claim actual costs instead. Choosing the wrong option can increase your tax bill unnecessarily.

2. Self Assessment deadlines landlords need to know (with real dates)

HMRC is strict when it comes to Self Assessment deadlines, and landlords are no exception. Missing a filing or payment date can trigger automatic penalties and interest, even if you only owe a small amount of tax.

For the 2025/26 tax year, which runs from 6 April 2025 to 5 April 2026, landlords should be aware of the following key Self Assessment dates.

Key Self Assessment deadlines for landlords

  • 5 October 2026
    Deadline to register for Self Assessment if this is your first time needing to declare rental income.

  • 31 October 2026
    Deadline for submitting a paper Self Assessment tax return.

  • 31 January 2027
    Deadline for submitting your online Self Assessment tax return and for paying any tax owed.

These deadlines are confirmed in HMRC’s official guidance:

What happens if a landlord misses a deadline?

If you miss the 31 January filing or payment deadline, HMRC can apply:

  • An automatic £100 late filing penalty
  • Daily penalties if the return remains outstanding
  • Interest on unpaid tax from the due date
  • Additional penalties for prolonged delays

Even if no tax is ultimately due, late filing penalties can still apply. HMRC makes this clear in its penalty guidance: Self Assessment penalties explained

Landlord tip: Treat Self Assessment deadlines as fixed. Registering early and filing well before January reduces the risk of penalties and gives you time to deal with unexpected tax bills before they become urgent.

3. What counts as “rental income” for landlords?

When HMRC talks about property income, it means more than just the monthly rent hitting your bank account. Many landlords under-declare income simply because they do not realise certain payments must also be included on their Self Assessment return.

In general, rental income includes all money you receive in connection with letting a property, not just the headline rent.

Income landlords usually need to declare

  • Rent payments received from tenants, whether paid weekly, monthly, or in advance.
  • Additional charges paid by tenants, such as:
    • Cleaning fees
    • Gardening or grounds maintenance
    • Utility charges you recharge to tenants
    • Service or maintenance fees
  • Lease-related income or premiums, such as lump sums paid for granting or extending a lease. How these are taxed depends on the length and nature of the lease.

HMRC is clear that if a tenant pays you for a service connected to the property, that payment normally forms part of your taxable rental income.

You can check the official guidance here:

Record keeping matters more than most landlords realise

HMRC expects landlords to keep clear, accurate records of:

  • All rent received
  • Dates payments were received
  • Income from services provided to tenants
  • Any refunds or adjustments made

Poor records are one of the most common reasons landlords struggle during HMRC checks or end up paying more tax than necessary.

Practical landlord tip: Use a separate bank account for rental income and property expenses. It removes guesswork, simplifies your Self Assessment return, and makes it far easier to evidence income if HMRC ever asks questions.

4. Allowable expenses landlords can usually claim

One of the biggest advantages of completing a Self Assessment return correctly is claiming the right expenses. As a general rule, HMRC allows landlords to deduct costs that are wholly and exclusively incurred for the rental business. Claiming legitimate expenses reduces your taxable rental profit and, in turn, your tax bill.

Common allowable expenses for landlords

While every property is different, landlords can often claim the following costs:

  • Letting agent and property management fees, including tenant-finding and ongoing management charges.
  • Repairs and maintenance, such as fixing leaks, repairing boilers, repainting, or replacing broken fixtures, provided the work restores the property rather than upgrades it.
  • Service charges and ground rent, where these apply to leasehold properties.
  • Landlord insurance, including buildings, contents, and public liability cover.
  • Safety and compliance checks, such as gas safety certificates, electrical safety reports, and fire safety assessments.
  • Replacement of domestic items, including like-for-like replacement of furnishings, white goods, and appliances under the replacement of domestic items relief.
  • Accountancy and professional fees that relate specifically to preparing rental accounts or property tax advice.

HMRC’s rental income guidance sets out the broader rules and record-keeping expectations for landlords:

Repairs vs improvements: the classic landlord trap

One of the most common areas of confusion is the difference between a repair and an improvement. Getting this wrong can lead to incorrect claims and potential HMRC challenges.

  • Repair: Work that restores something to its original condition or standard. This is usually deductible as an allowable expense.
  • Improvement: Work that upgrades the property beyond its original standard. This is normally treated as capital expenditure and not deducted from rental income.

For example, replacing a broken kitchen unit with a similar one is usually a repair. Installing a higher-spec kitchen where none existed before is likely to be an improvement.

If you carry out a large refurbishment between tenancies, the work may include a mix of repairs and improvements. In these cases, it is important to separate the costs clearly in your records so allowable expenses can be claimed correctly.

Landlord tip: Keep invoices that clearly describe the work carried out. Vague descriptions make it harder to justify whether a cost was a repair or an improvement if HMRC ever reviews your return.

5. Replacing domestic items: relief landlords can still use

The old “wear and tear” allowance is no longer available. However, most landlords can still claim tax relief when replacing certain items in a residential rental property by using Replacement of Domestic Items Relief.

This relief applies where you provide items for tenants to use and later replace them. It is designed to cover normal wear and replacement, rather than upgrades.

What qualifies for Replacement of Domestic Items Relief?

Landlords can usually claim relief for the like-for-like replacement of movable items supplied as part of the tenancy, including:

  • Beds, sofas, tables and chairs
  • Carpets, curtains and blinds
  • Fridges, freezers, washing machines and dishwashers
  • Other domestic appliances provided for tenant use

The key point is that the relief applies to replacements, not the initial purchase of items for a new or unfurnished property.

What does not qualify?

  • Items bought for a property that was previously unfurnished
  • Significant upgrades beyond a reasonable modern equivalent
  • Fixtures that form part of the building itself

If the replacement is an upgrade, HMRC normally allows relief only up to the cost of a like-for-like item, with any additional cost treated as capital expenditure.

HMRC explains how this relief works, and how it interacts with repair costs, in its Property Income Manual: Replacement of domestic items relief (HMRC)

Record keeping makes or breaks this claim

To support a claim for Replacement of Domestic Items Relief, HMRC expects clear evidence of:

  • The cost of the replacement item
  • That the item replaced an existing item provided with the tenancy
  • The date the replacement was made
Good habit for landlords: Keep the receipt for the replacement item and make a short note explaining what it replaced, for example “replaced broken fridge supplied with tenancy”. This simple step can save a lot of time if HMRC ever queries the claim.

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Mortgage interest and finance costs: how landlord tax relief works now

The way landlords receive tax relief on mortgage interest has changed significantly. For residential property landlords, mortgage interest and most other finance costs are no longer deducted in full when calculating taxable rental profits.

Instead, relief is given as a basic-rate tax reduction, currently set at 20%. This change catches many landlords out, particularly those completing Self Assessment without professional support.

How finance cost relief works in practice

Under the current rules, you:

  • Calculate your rental profit before deducting mortgage interest and finance costs.
  • Pay tax on that higher profit figure.
  • Then receive a 20% tax credit based on the lower of:
    • Your eligible finance costs
    • Your property profits
    • Your adjusted total income above the personal allowance

HMRC provides worked examples and detailed explanations of how this calculation operates:

Why this change matters for landlords

Although the rules do not change the cash you receive from rent, they can have a major impact on your overall tax position.

  • Your taxable income may appear higher, even if your real cash profit feels modest.
  • This can push some landlords into higher-rate or additional-rate tax bands.
  • It can also affect income-based calculations such as:
    • High Income Child Benefit Charge
    • Loss or tapering of the personal allowance
    • Student loan repayments

Different rules for different property types

The restriction on finance cost relief applies primarily to residential property. If you own a mix of property types, such as residential and commercial property, or operate through different ownership structures, the tax treatment can vary.

In these cases, the calculations quickly become more complex and the risk of overpaying tax increases.

Landlord insight: If mortgage interest makes up a large part of your costs, the finance cost restriction can materially change your tax bill. Getting tailored advice is often worthwhile, especially if you sit near a higher-rate threshold or receive child benefit.

Property allowance: when it helps landlords and when it does not

The property allowance is a £1,000 tax-free allowance that can simplify tax reporting for landlords with small amounts of rental income. It applies to gross property income, not profit, and using it is entirely optional.

While it sounds generous, the allowance does not suit every landlord and, in many cases, claiming normal expenses will produce a better tax outcome.

How the property allowance works

If you qualify for full relief under the property allowance:

  • Up to £1,000 of gross property income can be exempt from tax.
  • You may not need to notify HMRC or complete Self Assessment for that income.

HMRC explains the rules and eligibility criteria in its official guidance:

Why the allowance is optional

The property allowance cannot usually be claimed alongside the normal deduction of expenses. In most cases, it is an either-or choice:

  • Claim the £1,000 property allowance, or
  • Ignore the allowance and deduct actual allowable expenses

This is why the allowance often works best for landlords with very small amounts of rental income and minimal costs.

When the property allowance can help

  • You earn a small amount of rental income, for example from a single room or occasional letting.
  • Your property-related expenses are low.
  • You want a simpler reporting position with less admin.

When it usually does not

  • You operate a typical buy-to-let property.
  • You have meaningful expenses such as agent fees, insurance, repairs, or mortgage interest.
  • Claiming actual costs would exceed £1,000.

In these situations, using the property allowance can actually increase your tax bill.

Simple rule of thumb:
Very small rental income with minimal costs, the property allowance can be convenient.
A normal buy-to-let with real expenses, claiming allowable expenses usually works out better.

Rent a Room Scheme: different rules for lodgers in your main home

If you rent out a furnished room in your main home, the tax rules are different from standard buy-to-let property. In this situation, you may be able to use the Rent a Room Scheme, which provides a much higher tax-free allowance.

How the Rent a Room Scheme works

Under the scheme, you can earn:

  • Up to £7,500 per year tax-free if you rent out a room in your main home
  • Up to £3,750 each if the income is shared with another person, such as a joint owner

This threshold applies to gross income, including rent and any charges for services such as cleaning or meals.

HMRC sets out the full conditions and eligibility rules here:

How this differs from buy-to-let income

The Rent a Room Scheme is separate from standard landlord tax rules. It applies only where:

  • The property is your main or only home
  • The room is furnished
  • The accommodation is let to a lodger, not as a separate self-contained property

If your income stays within the Rent a Room threshold, you may not need to complete a Self Assessment return for that income. If you exceed the limit, you can either:

  • Pay tax on the excess over the threshold, or
  • Opt out of the scheme and claim actual allowable expenses instead

Important interaction with other property income

Rent a Room income is treated differently from buy-to-let income and does not automatically combine with it. However, if you have other rental properties or sources of income, the overall tax position can still become complex.

Landlord tip: Renting a room in your own home can be very tax-efficient, but the conditions matter. If the setup looks more like a separate flat than a lodger arrangement, the Rent a Room Scheme may not apply.

Jointly owned rental property: how income and profits are usually split

If you own a rental property with someone else, HMRC normally expects each owner to declare their share of the rental income and expenses on their own Self Assessment tax return.

How that split works depends on both the legal ownership and, in some cases, the beneficial ownership of the property.

How rental income is split in most cases

For many jointly owned properties, the split is straightforward:

  • Each owner declares income and expenses in line with their ownership share.
  • Spouses and civil partners who jointly own property are usually treated as owning it 50:50 for tax purposes.

This 50:50 default applies even if one person paid more towards the purchase or mortgage, unless a different beneficial ownership arrangement is formally in place.

HMRC explains this default position in its guidance on jointly owned property:

When the split is not 50:50

If you and a co-owner hold the property in unequal beneficial shares, the rental income can be taxed in those actual proportions. This is most commonly seen where:

  • Ownership is held as tenants in common
  • A declaration of trust sets out unequal shares
  • Spouses or civil partners elect to be taxed on unequal shares

For married couples and civil partners, HMRC normally requires a Form 17 declaration to confirm a split other than 50:50, supported by evidence of beneficial ownership.

You can find HMRC’s guidance here: Form 17: Declaration of beneficial interests

Why guessing the split is risky

Incorrectly splitting rental income is a common compliance issue. Declaring the wrong proportions can lead to underpaid tax and HMRC challenges later.

Important note: If your ownership split is not straightforward, do not guess. Make sure the beneficial ownership is properly documented and, where required, formally declared to HMRC.

Payments on account: why your first landlord tax bill can feel “too high”

Many landlords are caught off guard by payments on account, especially in their first year of completing a Self Assessment return. These are advance payments towards the following tax year’s bill and can make the amount due in January feel unexpectedly large.

What are payments on account?

If your Self Assessment tax bill exceeds HMRC’s thresholds, you may be required to make payments on account. These are based on your previous year’s tax position.

HMRC’s rules work broadly as follows:

  • Each payment is usually 50% of your previous year’s tax bill.
  • You make two payments on account for the next tax year.
  • These are paid alongside your balancing payment for the year just ended.

HMRC explains the system clearly in its guidance: Payments on account explained (GOV.UK)

Why the first bill feels so large

In the first year payments on account apply, you are effectively paying:

  • The full tax bill for the year just ended, plus
  • The first payment on account for the following year

This means the amount due in January can be significantly higher than expected, even though part of it relates to future tax.

Payment deadlines landlords need to know

Payments on account are usually due on:

  • 31 January – first payment on account, plus any balancing payment
  • 31 July – second payment on account

These deadlines apply every year while payments on account remain in place.

Can payments on account be reduced?

If your rental income or overall taxable income is expected to fall, you may be able to apply to reduce your payments on account. This must be done carefully.

  • If you reduce payments too far and underpay, interest can apply.
  • Any shortfall will still be due later.
Landlord tip: Payments on account are not an extra tax, but a timing issue. Understanding this early helps avoid panic when the January bill lands.

If you sold a rental property: the 60-day Capital Gains Tax rule

Selling a UK residential rental property can create a Capital Gains Tax (CGT) liability, and HMRC operates a separate, time-sensitive reporting process that often catches landlords out.

For disposals of UK residential property completed on or after 27 October 2021, any Capital Gains Tax due must usually be reported and paid within 60 days of completion.

What the 60-day CGT rule means for landlords

  • You must submit a UK Property CGT Return within 60 days of the sale completing.
  • Any Capital Gains Tax due must be paid by the same 60-day deadline.
  • This applies even if you already complete a Self Assessment tax return.

HMRC sets out the reporting and payment rules here: Report and pay Capital Gains Tax on UK property (GOV.UK)

How this fits with Self Assessment

Reporting the disposal within 60 days does not replace your normal Self Assessment obligations.

  • The gain is still reported on your Self Assessment tax return for the relevant tax year.
  • The 60-day return acts as an in-year report and payment, rather than a final calculation.

HMRC confirms that both steps are required where CGT is due: Capital Gains Tax reporting rules

Why this rule catches landlords out

Many landlords assume Capital Gains Tax is dealt with only through Self Assessment. Missing the 60-day deadline can result in penalties and interest, even if the gain is later reported correctly.

Important reminder: The 60-day CGT return is a separate obligation. Filing your Self Assessment on time does not remove the need to report and pay Capital Gains Tax shortly after the sale completes.

Records landlords need to keep (and how long)

Good record keeping is not optional for landlords. HMRC expects clear, accurate records to support the figures reported on your Self Assessment tax return. Poor or missing records are one of the most common reasons HMRC challenges landlord returns.

What records landlords should keep

HMRC expects you to keep evidence covering both income and expenses related to your rental property, including:

  • Dates the property was let and periods it was empty
  • Rent received from tenants
  • Income from services provided to tenants, such as cleaning or maintenance
  • Receipts and invoices for expenses
  • Bank statements showing rental income and property-related payments
  • Details of allowable expenses claimed

HMRC sets out its record-keeping expectations in official guidance:

How long landlords must keep records

In most cases, landlords must keep records for at least 5 years after the 31 January filing deadline for the relevant tax year.

For example, records for the 2024/25 tax year, filed by 31 January 2026, should normally be kept until at least 31 January 2031.

Digital records and practical organisation

Records can be kept digitally or on paper, but they must be complete and readable. Many landlords find digital storage easier to manage and safer long-term.

Practical landlord tip: Store digital copies of receipts and invoices alongside a simple income and expense spreadsheet. This makes Self Assessment faster and provides a clear audit trail if HMRC ever asks questions.

Making Tax Digital for landlords: what is changing

Making Tax Digital for Income Tax (MTD for ITSA) is set to change how many landlords report their rental income to HMRC. Instead of a single annual Self Assessment return, affected landlords will need to keep digital records and submit updates during the tax year.

Whether and when you fall into MTD depends on your qualifying income. This is your gross income before expenses from self-employment and/or property combined.

MTD start dates for landlords

HMRC has confirmed the following phased rollout:

  • Qualifying income over £50,000 (2024/25):
    MTD applies from 6 April 2026
  • Qualifying income over £30,000 (2025/26):
    MTD applies from 6 April 2027
  • Qualifying income over £20,000 (2026/27):
    MTD is planned to apply from 6 April 2028

These thresholds look at income before expenses, which means some landlords with relatively modest profits may still be brought into MTD.

HMRC’s official guidance can be found here: Making Tax Digital for Income Tax (GOV.UK)

What MTD will mean in practice for landlords

Once MTD applies, landlords will usually need to:

  • Keep digital records of rental income and expenses
  • Submit quarterly updates to HMRC using compatible software
  • Submit an end-of-period statement to finalise figures

A final declaration will still be required each year, replacing the traditional Self Assessment return.

Landlord heads-up: MTD is based on gross income, not profit. If your rental income is close to a threshold, planning early and using suitable software can prevent a last-minute scramble.

Common landlord Self Assessment mistakes to avoid

Many landlord tax problems are not caused by complex rules, but by small misunderstandings that snowball over time. Avoiding the mistakes below can save you money, reduce stress, and lower the risk of HMRC enquiries.

Mixing up repairs and improvements

This is one of the most frequent and costly errors. Repairs that restore a property to its original condition are usually allowable expenses. Improvements that upgrade the property beyond its original standard are normally capital costs.

Claiming improvements as repairs can lead to overclaimed expenses and HMRC challenges later.

Forgetting how mortgage interest relief works

For residential landlords, mortgage interest is not deducted directly from rental profits. Instead, relief is given as a 20% basic-rate tax reduction.

Overlooking this rule can result in underpaid tax or unexpected bills: Mortgage interest tax relief explained (GOV.UK)

Missing the 5 October registration deadline

If it is your first time needing to complete a Self Assessment return for rental income, you must register by 5 October following the end of the tax year.

Missing this deadline can lead to late filing penalties even if you submit the return later.

Forgetting the 60-day CGT reporting requirement

Selling a rental property can trigger a separate Capital Gains Tax obligation. In many cases, you must report and pay CGT within 60 days of completion, in addition to reporting the gain on your Self Assessment return.

Failing to do this is a common and expensive oversight.

Weak or incomplete record keeping

HMRC expects landlords to keep clear records of income, expenses, and supporting documents. Poor records make it difficult to justify claims and can increase the likelihood of adjustments or penalties.

HMRC’s guidance on records is clear: Record keeping requirements (GOV.UK)

Final thought: Most landlord mistakes are preventable. Understanding the rules, keeping good records, and getting advice when something changes can make Self Assessment far less painful.

HMRC resources landlords actually use

If you are filing rental income through Self Assessment, these are the HMRC pages worth bookmarking. They are the ones landlords and agents tend to return to again and again, especially around deadlines and when working through the SA105 property pages.

Quick tip: Bookmark the deadlines page and the “help with property” page. If you only keep two HMRC links to hand, make it those.

Final thoughts: staying compliant and confident as a UK landlord

Self Assessment for landlords does not have to be overwhelming, but it does reward getting the details right. Understanding what counts as rental income, claiming the right expenses, meeting deadlines, and keeping solid records can make a meaningful difference to both your tax bill and your peace of mind.

As the rules continue to evolve, particularly with Making Tax Digital on the horizon, many landlords find that what worked a few years ago is no longer enough. Small mistakes, missed deadlines, or misunderstood reliefs can quickly lead to penalties, interest, or paying more tax than necessary.

At Accounting Wise, we help landlords across the UK take the stress out of Self Assessment. Whether you own a single rental property or a growing portfolio, we can:

  • Prepare and file your Self Assessment return accurately and on time
  • Ensure you are claiming all allowable expenses and reliefs correctly
  • Help you plan ahead for payments on account and Making Tax Digital
  • Provide clear, practical advice tailored to your situation

If you would rather spend your time managing your property than worrying about HMRC rules, we are here to help. Getting the right support can turn Self Assessment from a yearly headache into a straightforward, well-managed process.

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Landlord Self Assessment Guide FAQ

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Not always. If your gross rental income is £1,000 or less in a tax year and you qualify for the property allowance, you may not need to file. If your rental income exceeds £1,000, or you choose to claim actual expenses instead of the allowance, you will usually need to complete a Self Assessment return.

Rental income includes more than just rent. It can also include payments from tenants for services such as cleaning, gardening, utilities you recharge, and some lease-related payments. HMRC expects all income connected to the letting to be declared.

No. For residential rental property, mortgage interest is no longer deducted directly from rental profits. Instead, landlords receive tax relief as a basic-rate (20%) tax reduction, which is applied after the tax has been calculated.

Landlords can usually claim expenses that are wholly and exclusively for the rental business. Common examples include letting agent fees, repairs and maintenance, landlord insurance, safety checks, replacement of domestic items, and accountancy fees related to rental income.

Yes. If you sell a UK residential rental property and Capital Gains Tax is due, you usually must report and pay the tax within 60 days of completion, even if you also complete a Self Assessment return.

In most cases, landlords must keep records for at least 5 years after the 31 January filing deadline for the relevant tax year. Records should include income, expenses, receipts, and bank statements.

Making Tax Digital for Income Tax applies based on gross qualifying income. Landlords with income over £50,000 will be required to use MTD from 6 April 2026, with lower thresholds phased in over subsequent years.

Glossary of Key Landlord Tax Terms

Self Assessment – HMRC’s system for reporting and paying tax on income that is not taxed at source, including rental income.

Property Income – Income received from letting property, including rent and certain charges paid by tenants for services such as cleaning or maintenance.

Property Allowance – A £1,000 tax-free allowance for gross property income. It is optional and usually cannot be claimed alongside normal expense deductions.

Allowable Expenses – Costs that are wholly and exclusively incurred for running a rental business, such as agent fees, repairs, insurance, and safety checks.

Repairs – Work that restores a property to its original condition or standard. These costs are usually deductible from rental income.

Improvements – Work that upgrades or enhances a property beyond its original standard. These costs are normally treated as capital expenditure, not an income expense.

Replacement of Domestic Items Relief – Tax relief for like-for-like replacement of movable items provided to tenants, such as furniture and appliances, in residential lets.

Finance Costs – Interest and other costs relating to borrowing for rental property, including mortgage interest and arrangement fees.

Finance Cost Restriction – The rule limiting mortgage interest relief for residential landlords to a basic-rate (20%) tax reduction, rather than a full deduction from profits.

Payments on Account – Advance payments towards the next tax year’s tax bill, usually paid in two instalments on 31 January and 31 July.

SA105 (UK Property Pages) – The section of the Self Assessment return used to report rental income and expenses from UK property.

Rent a Room Scheme – A separate tax scheme allowing individuals to earn up to £7,500 tax-free from letting a furnished room in their main home (£3,750 if shared).

Capital Gains Tax (CGT) – Tax charged on the profit made when selling a property that has increased in value.

60-Day CGT Reporting Rule – A requirement to report and pay any CGT due on UK residential property sales within 60 days of completion.

Jointly Owned Property – Rental property owned by more than one person. Income and expenses are usually split according to ownership, with a default 50:50 split for spouses and civil partners unless declared otherwise.

Form 17 – An HMRC declaration used by spouses or civil partners to confirm unequal beneficial ownership of rental property for tax purposes.

Making Tax Digital (MTD) for Income Tax – An HMRC initiative requiring landlords above certain income thresholds to keep digital records and submit quarterly updates using compatible software.

Qualifying Income – Gross income before expenses from self-employment and/or property, used to determine whether MTD applies.

HMRC – HM Revenue & Customs, the UK government department responsible for tax administration and compliance.

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Quotes & Payment Reminders

MTD VAT & CIS Returns

Payroll Services & HR Support

Unlimited Support & Advice

Balance Accounting Software - The Balance App
Right Right Accounting Software
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Accounting Wise is a trading style of Accounting Wise Ltd, a limited company registered in England under company number 09365202. Our registered office is: The Carriages, Station Road, Ware, SG12 9PL UK.

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