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In order to effectively manage your UK landlord taxes, it is important to understand all of the deductions that you are eligible to claim.  We have put together 6 steps to help you get the best results!

Step 1: Determine your rental income and expenses

Typically, renting out property comes with a lot of expenses. Fortunately, you can deduct a variety of "allowable expenses" from your gross rental revenue to help lower your tax payment. It also covers costs for gardening, cleaning, insurance, service fees, letting agent fees, and property management fees.

Your supplemental SA105 form includes a summary of your rental charges that are acceptable: The replacement of sofas, mattresses, carpets, curtains, white goods, beds, crockery, cutlery, and other household items may be eligible for relief under the Replacement Domestic Items provision if your rental property is furnished or partially furnished.

Step 2: Register for Self Assessment

If you don't claim "allowable expenses," which are fees you paid to rent out your property, you can earn up to £1,000 a year in tax-free rental income. This is called your property allowance.

If the property or land is jointly-owned, every joint owner may offset their portion of the gross rental income with the £1,000 property allowance. If your gross yearly rental income is between £1,000 and £2,500, you must tell HMRC. If your income is higher, you must register for self-assessment and file a tax return (SA100) plus an additional page (SA105).  Register online at  You must register by the 5 October following the end of the tax year in which you earned taxable rental income (5 April), if you did not file a Self Assessment tax return in the prior tax year.

Step 3: Organise your paperwork

Gather necessary documents, such as rental income records, expenses receipts, mortgage interest statements, and any other relevant financial information. Take your time when completing your Self Assessment tax return for the same reason. If you have all the essential information on hand, you should be able to finish it in three to four hours. If it helps, split it up into a few sessions. Choose a location where there won't be any interruptions so you can focus entirely on the task at hand, do it, and move on.

Step 4: Include additional income

In order for HMRC to determine how much tax you owe on your taxable rental income, you must include all sources of taxable income in your Self Assessment tax return. This includes job income, which some landlords filing their first Self Assessment tax forms may forget to mention. Self-employment, savings interest, stock dividends, capital gains from the sale of assets, state or private pension payments, and even some public benefits can all result in taxable income. Even with a little amount of rental income added, if your income from these sources is relatively low, there may not be any tax due after accounting for your tax deductions and exemptions. You are given a tax-free Personal Allowance each year. It is £12,570 for the tax year 2023–2024. Until your taxable income exceeds this, you do not pay tax.

Step 5: Claim all relevant tax reliefs

Make sure to claim all the tax reliefs and allowances you're entitled to. Your supplemental SA105 form includes a summary of your rental charges that are acceptable. You might be eligible for Replacement Domestic Items relief if your rental property is furnished or partially furnished, which would cover the cost of replacing things like beds, mattresses, carpets, curtains, white goods, sofas, crockery, and cutlery.

Landlords' allowable expenses may consist of:
  • Upkeep and general repairs to the house
  • Renovating between tenancies
  • Costs of cleaning and gardening at the rental property
  • Replacing fixtures and fittings on a like-for-like basis only (no betterment is allowed)
  • Service fees and ground rents
  • Gas, electricity, water rates, and council tax (if you pay them rather than your tenant)
  • Insurance (including public liability, building, and contents)
  • Management or letting agent fees
  • Legal fees or advice for tenancies of  one year or less
  • Accounting and book-keeping charges
  • Direct expenses (such as phone calls, stationery, and tenant ads) but only the percentage used for your rental business)
  • Vehicle/fuel costs when visiting the rental property
  • Expenditures associated with getting rid of outdated furniture, electronics, etc.

Mortgage capital repayments are not acceptable expenses for landlords to deduct. Instead, landlords currently get a 20% tax credit. Installing a new security alarm system is only deductible if it is a "like for like" replacement for the existing system; it cannot be superior. If upgrading an alarm system would have cost £650 but replacing an old one would have cost £400, you can only deduct £400 from your permitted expenses.

Step 6: Submit your tax return

File your Self Assessment tax return online before the deadline, which is usually by the end of January following the end of the tax year. Landlords in the UK are required to complete both the main Self Assessment tax return (SA100, an eight-page form) and an additional page (SA105, a two-page form). Your taxable rental income and any expenses you want to deduct are specified in the SA105. If you have other taxable income to disclose, such as from self-employment (SA103), there may be extra sections to fill out. You can fill up tax returns and submit them to HMRC directly, but you won't receive any of the advantages of third-party filing software. Don't wait until the last minute to finish your self-assessment tax return.

You don't have to wait till the online filing deadline (midnight on January 31) is rapidly approaching; you can file at any time until April 6. You won't have to pay your tax bill any earlier just because you file your tax return early. Additionally, you're less likely to make mistakes since you're not pressed for time to fulfill a deadline. Your National Insurance number, 10-digit Unique Taxpayer Reference (which you receive when you register for Self Assessment), and employer reference, if applicable, must all be included in your SA100.

Step 7: Pay any tax owed

If you owe tax on your rental income, make sure to pay it by the deadline to avoid penalties and interest charges. Remember to retain all relevant documents and records related to your rental income and expenses for at least six years in case of a tax audit. Remember, tax laws and regulations can change, so it's essential to verify the current procedures and requirements on the HMRC website or get in touch with me.

Sara Grey
Lettings Manager
T: 01483 284141