If you’re a landlord or property investor in the UK, navigating the self-assessment process can feel like one more administrative burden on your already full plate. But understanding how self-assessment works, and how it affects your property income, is crucial to staying compliant and making the most of the tax reliefs available to you.
Whether you’re letting out a single flat or managing a growing portfolio, this guide will walk you through what you need to know, including the types of income you must report, which expenses you can claim, and how to prepare for your annual tax return with confidence.
What Does Self-Assessment Mean for Landlords?
As you’re likely aware, self-assessment is the method HMRC uses to collect tax from individuals who don’t have it deducted automatically from their income. If you earn money from renting out property, you’ll likely need to complete a self-assessment tax return each year.
In simple terms, this means declaring your rental income, subtracting any allowable expenses and paying Income Tax on the profit. Not all rental income needs to be declared, however – if you earn under £1,000 annually from property, you may fall under the property allowance and be exempt from filing. But once your rental income goes over that threshold, it must be reported.
It’s also worth noting that if a property is jointly owned — for example, between spouses or business partners — each owner is responsible for declaring their share of the income and related costs.
Declaring Your Rental Income
When completing your tax return, you’ll need to include income from various property-related sources. This could be from a long-term residential let, a furnished holiday property or even a commercial unit. Income from overseas properties must also be declared if you’re a UK resident.
For many landlords, the rental payments received are the most obvious income stream to report. But there are other, less obvious sources that also count – such as fees paid for granting a lease or income from subletting.
Even if your letting is managed by an agent, or rent is paid irregularly, it’s still your responsibility to ensure that all relevant income is accurately reported.
What Can You Claim as Expenses?
The good news is that not all of your rental income is taxable. HMRC allows landlords to deduct certain expenses from their rental income before calculating the tax due — but only if those expenses are “wholly and exclusively” for the purposes of letting the property.
Routine maintenance, such as fixing a boiler or replacing worn-out carpets, is generally allowable. So are letting agent fees, insurance premiums, and accountant costs related to your property business. If you pay for services like cleaning or gardening to maintain the property for tenants, those too may be deducted.
One area that often causes confusion is mortgage interest. Since April 2020, landlords can no longer deduct this directly from their rental income. Instead, you may be entitled to a 20% tax credit based on the interest portion of your mortgage payments. This change has had a significant impact on the way landlords calculate their tax, and it’s important to factor it into your planning.
Key Dates and What Happens If You Miss Them
Self-assessment comes with strict deadlines, and missing them can result in automatic penalties. If it’s your first time submitting a return, you’ll need to register with HMRC by 5 October following the end of the tax year. The completed return is then due by 31 January, along with any tax owed.
If you make payments on account — essentially advance payments towards your next year’s bill — you’ll also need to meet the 31 July deadline for the second instalment.
Failing to submit your return or pay your tax on time triggers penalties, starting with an initial £100 fine. The longer the delay, the more those penalties can escalate, adding unnecessary stress and financial cost.
How to Stay Organised and File Accurately
One of the most effective ways to manage your self-assessment obligations is simply to stay organised throughout the year. That means keeping up-to-date records of your rental income, holding on to receipts and invoices, and tracking any relevant outgoings as they occur.
Using accounting software or cloud-based apps can make this much easier, especially if you own more than one property. It also helps to stay informed about any changes to tax rules — for example, updates to reliefs or allowances — as these could impact how much you owe.
Being proactive in your tax planning not only helps you avoid last-minute scrambles in January but also ensures you’re claiming everything you’re entitled to, potentially saving you hundreds or even thousands of pounds.
How AK Tax Supports Landlords with Self-Assessment
At AK Tax, we understand that landlords often wear many hats — and dealing with tax returns is rarely the part you enjoy most. That’s why we provide expert, tailored support for property owners navigating self-assessment.
From preparing and submitting your return to advising on which expenses you can claim, our team ensures you remain compliant with HMRC’s requirements while keeping your tax bill as efficient as possible. We also help you plan ahead, so you’re never caught off guard by a tax deadline or policy change.
Whether you let out a single property or manage a diverse portfolio, we’re here to make the self-assessment process simpler and more rewarding. Contact AK Tax today to find out how we can simplify your self-assessment and help you make the most of your property income.
