What to set up
- Register for Self Assessment. If rental income is above the £1,000 property allowance.
- Understand the finance cost rules. Mortgage interest gives a 20% tax credit rather than a deduction, which matters for higher rate taxpayers.
- Track allowable expenses. Letting agent fees, insurance, repairs, safety checks and some travel.
- Separate repairs from improvements. Repairs are usually deductible now; improvements are capital, relieved against a future gain.
- Keep records. Rent received and every cost, ready for your return and any future sale.
New to letting property?
The finance cost rules and allowable expenses are easy to get wrong. TaxTune sets up your property tax correctly, claims every cost, and keeps you ahead of the deadlines.
Let us handle your property tax
We prepare your rental accounts, apply the finance cost rules, claim every expense, and manage any capital gains reporting. Fixed fee.
Frequently asked questions
Do I have to declare rental income?
Yes, if it is above the £1,000 property allowance. You report rental income and allowable expenses through Self Assessment and pay tax on the profit.
How is mortgage interest treated for landlords?
It is no longer a simple deduction. You receive a 20% tax credit on the finance costs, which increases the effective tax for higher rate landlords compared with the old rules.
What expenses can a new landlord claim?
Letting agent fees, insurance, repairs and maintenance, safety certificates, ground rent and service charges, and some travel. Improvements are capital rather than an expense.
Do I need to tell HMRC when I become a landlord?
If your rental income is above the property allowance, register for Self Assessment by 5 October following the tax year you started letting.
What records should a landlord keep?
Rent received and every allowable cost, plus records of the purchase and any improvements, which matter for a future capital gains calculation. Keep them for at least 5 years.