Every year, landlords who get paid rent by tenants in their properties need to work out their tax position under self-assessment so they can report on income and pay any taxes that may be due. This also means claiming expenses, allowances and exemptions to correctly calculate profits and gains. 

  • Landlords earning less than £1,000 rental income (before expenditure) will not be subject to income tax, as this will be covered by their property allowance.  
  • Landlords receiving gross income between £1,000 to £2,500 should contact HMRC to confirm their reporting requirements. However, where rental income of £2,500 or more is received, registration for self-assessment will be required, along with the completion of self-assessment tax returns. 

Our Buy-to-Let Tax services

For landlords, navigating how much tax is payable on rental properties can be complicated, especially where large property portfolios are involved.  

To help you, we can: 

  • Calculate your taxable rental profit 
  • Register and complete your annual self assessment tax return declaring your rental profit 
  • Claim all allowable rental expenses to reduce your tax liability 
  • Advise on how much tax is due and when 
  • Provide Capital Gains Tax (CGT) advice on any potential property sale 
  • Advise on the upcoming Making Tax Digital initiative for landlords 

What expenses are allowable when working out my rental profit?

There are a number of expenses that can be claimed against your rental income to gain tax relief. A tax advisor can make sure that you are claiming all the appropriate reliefs, and deducting all the allowable expenses, which could include: 

  • Advertising and marketing (cost of listings on property platforms and digital ads) 
  • Maintenance and repair costs 
  • Ground rent 
  • Insurance premiums (buildings, contents and public liability) 
  • Legal and accountancy fees 
  • Letting agent and property management fees 
  • Mortgage interest (based on the 20% tax relief allowance) 
  • Travel and expenses related to the servicing of your property 

This is not an exhaustive list, and there are many more expenses that can be offset against your rental income to reduce the amount of tax you will owe.

What relief is available for when I sell property?

When selling property, there are other specific reliefs available too. For example, when calculating any Capital Gains Tax (CGT) that might be chargeable on a property sale, you get relief for all the years that you’ve lived in the property, and for the final nine months of your ownership (private residence relief). 

There are also opportunities to reduce your bill by deducting the cost of any improvements made that have increased the asset’s value. For example, adding an extension, loft conversion, or a new kitchen-diner before sale would be tax deductible.  

Solicitor fees and estate agent fees paid when you purchased and sold the property can also be factored into the CGT calculation. 

Making Tax Digital for Landlords

Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA), also known as Making Tax Digital for Income Tax, will come into effect:  

  • From April 2026 for sole traders and landlords with business or property income above £50,000  
  • From April 2027 for sole traders and landlords with business or property income above £30,000 
  • The Government has announced its intent to expand this scheme to include those with an income below £30,000, however specific details have not yet been released. 

Under Making Tax Digital, landlords will be required to send quarterly updates to HMRC, as well as a final declaration by 31st January.   

To learn more about the transition to MTD, you can read our guide here. 

Who we help

Our clients include individuals, partnerships and estates with one or two rental properties as well as those with bigger portfolios of up to 50 properties. 

Whether you’re starting your first rental or have been renting for years, we can guide you through the compliance aspects of reporting your rental income as well as helping you to plan ahead for the future when it’s time to sell or to pass your properties on. 

If you need help with declaring your rental income, completing self-assessment or would like to discuss forward planning please contact one of our expert advisors.