Landlords Rental Income and Tax Return

Landlords

We will prepare your rental accounts and self assessment tax return, and submit them to HMRC on your behalf. If Making Tax Digital (MTD) applies to you we will deal with this for you.

Will Making Tax Digital Apply To Me

You will need to use MTD for Income Tax:

from 6 April 2026, if your gross income from property rentals and any self-employment totals over £50,000
from 6 April 2027, if your gross income from property rentals and any self-employment totals over £30,000
from 6 April 2028, if your gross income from property rentals and any self-employment totals over £20,000.

HMRC will use the qualifying income included on your most recent tax return to identify if you will have to start using MTD for Income Tax.

For example, if you have to use MTD for Income Tax from 6 April 2026 this will be identified based on your 2024 to 2025 tax return (which has to be submitted by 31 January 2026).

It is important to understand that gross income is the rent before expenses. If you use a letting agent to manage the property, your gross income is the rent the tenant pays your agent rather than the net figure the agent pays you.

What Rental Expenses Can I Claim

Here are some of the expenses you can claim to set aagainst your rental income:

letting agent and property management fees
maintenance and repair costs
utility bills (if you pay them)
ground rent, service charges, and rent on a leasehold property
council tax (when the property is empty or you pay it as landlord)
cleaning and gardening
buildings and contents insurance
advertising and stattionery costs
mortgage interest (on residential properties this is only available as a 20% tax credit rather than being allowable at you highest rate of tax)

It is important to distinguish between property repairs and property improvements. Improvements are not allowable against income tax but will be available for capital gains tax purposes when the property is sold. What constitutes an improvement for tax purposes is complicated and we will be pleased to advise you.

Selling Your Property

Capital Gains Tax on residential property is charged at 18% for basic-rate income taxpayers and 24% for higher or additional-rate taxpayers on the profit you make. You must report and pay any tax due on UK residential property within 60 days of the property sale completing. We can prepare you capital gains tax calculation ensuring that all eligble costs are claimed and submit this to HMRC within the 60 day deadline.

Business Asset Disposal Relief (BADR) may be available on the sale of a commercial property. We would be pleased to advise you.