UK landlords report rental income on Self Assessment, with separate sections for UK property and overseas property, plus separate treatment for Furnished Holiday Lets (regime abolished from April 2025) and rent-a-room schemes. The deadline is 31 January following the tax year end. From April 2026, landlords with gross rental income over £50,000 must also comply with MTD for Income Tax.

This guide explains what to report, how to compute the taxable amount, and the common reporting mistakes.

What counts as rental income

Reportable on the Self Assessment property pages:

• Rent received during the tax year (cash basis by default; accruals available by election for landlords with income over £150,000).
• Service charges received from tenants — typically for utilities, communal areas, building services.
• Insurance proceeds received for lost rent during a covered period.
• Premium payments on the grant of a lease (partly taxable as income).

What''s NOT rental income:

• Deposit received from a tenant — until and unless it''s retained for damages.
• Council tax paid by the tenant directly to the council (you''re not receiving it).
• Rent received before the start of the tax year (allocated to that earlier year).

The mortgage interest restriction

For individual landlords (since 2017):

1. Compute rental profit WITHOUT deducting mortgage interest.
2. Apply Income Tax at your marginal rate to that profit.
3. Reduce the tax by 20% of the interest paid.

Effect for higher-rate taxpayers: pays significantly more tax on rental income than under the pre-2017 rules. See our landlord tax UK guide for the worked example.

Limited-company landlords are NOT affected by this restriction — companies still get full Corporation Tax deduction.

Allowable expenses

Common expenses you can deduct from rental income:

• Letting agent fees and management charges.
• Maintenance and repairs (like-for-like, not improvements).
• Insurance (landlord, building, contents, rent guarantee).
• Council tax and utility bills paid by the landlord.
• Ground rent and service charges paid by the landlord on leasehold properties.
• Accountancy fees for preparing rental accounts and tax returns.
• Replacement of domestic items (Replacement Domestic Items Relief — like-for-like).
• Travel costs between properties (subject to wholly and exclusively rule).
• Costs of finding tenants — advertising, referencing, credit checks.
• Cost of evicting bad tenants — court fees, legal costs.

NOT allowable:

• Capital improvements (extensions, new bathrooms beyond like-for-like, structural changes) — these go into the property''s base cost for CGT when sold.
• Private use of the property.
• Mortgage capital repayments — the principal portion. Only mortgage interest gets the 20% credit.

The "wholly and exclusively" rule

Costs are allowable only when they''re incurred wholly and exclusively for the rental business. Two practical implications:

Travel

Travel from your home to a single property you also live near, frequently and predictably, is treated by HMRC as commuting — not a business cost. Travel between multiple properties, or to a property you''re actively managing, is allowable.

Phone, computer, home office

If you use a phone or computer for both rental and other purposes, you can claim a proportion of the cost. Be conservative — HMRC questions hobbyist claims.

Cash basis vs accruals basis

Most UK landlords default to cash basis — income recorded when received, expenses when paid.

• Cash basis is the default if your gross rental income is £150,000 or less and you don''t opt out.
• Accruals basis is required above £150,000 or if you elect into it.

For most SME landlords, cash basis is simpler and works fine. The main practical difference: at year-end you don''t need to make accruals for invoices not yet received or rent earned but not paid.

How to actually file

On the standard Self Assessment return (SA105 property pages):

• Box 5: Rents and other income from property.
• Box 6: Premiums for the grant of a lease.
• Boxes 24-29: Property expenses by category.
• Box 41: Allowable loan interest (subject to 20% restriction).
• Boxes 45-47: Capital allowances (limited applicability post-FHL).

A separate SA106 page is used for overseas property. The (now-abolished) FHL regime had its own treatment until April 2025; post-2025, what was previously FHL income merges into ordinary property income.

The deadline: 31 January following the tax year end. Late filing penalties apply per Self Assessment rules.

MTD for Income Tax — coming April 2026

If your gross rental income exceeds £50,000 in 2024/25, you''re in scope of MTD ITSA from 6 April 2026:

• Digital records of every transaction.
• Quarterly updates to HMRC (7 August, 7 November, 7 February, 7 May).
• Year-end finalisation by 31 January following the tax year.

See our MTD for landlords guide for the full mechanics. Start preparing now — switching software mid-year is harder than starting fresh.

Common reporting mistakes

• Forgetting service charges paid by the landlord — common on leasehold properties. Deductible but often missed.
• Claiming improvements as repairs — anything beyond like-for-like is capital, not revenue.
• Missing the mortgage interest restriction calculation — easy to omit on DIY returns.
• Not declaring informal letting (a spare room, occasional Airbnb) — HMRC sees lettings platform reports and cross-references.
• Incorrect treatment of jointly-owned property — must be split correctly between owners, typically per beneficial ownership.

Rent-a-room scheme — the special case

If you let a furnished room in your only or main home, you can elect into the rent-a-room scheme:

• Tax-free threshold: £7,500 per year (£3,750 if shared with another owner).
• Below the threshold: no tax, no need to declare.
• Above the threshold: you can elect to be taxed on the excess only (with no expenses), or be taxed under standard rental rules.

The scheme is available only for furnished accommodation in your own home — not whole-property lettings.

What to do this month

• If you''re reporting for the previous tax year and haven''t filed: do it now before late penalties accrue.
• Calculate your gross rental income for 2024/25. If over £50,000, you''re in MTD scope from April 2026.
• Audit your expenses — most landlords miss 10-20% of allowable expenses on DIY returns. A bookkeeper or accountant typically pays for themselves on a 3+ property portfolio.
• Set calendar reminders for the 31 January and 31 July deadlines.