Landlord Tax Return UK: What Rental Income Do I Need to Declare to HMRC?

If you receive rental income in the UK — from a buy-to-let property, Airbnb, or lodger — you must declare it to HMRC via a Self Assessment tax return. This guide explains what landlords must report, what expenses you can claim, and how Accounted4Tax helps landlords pay only the tax they actually owe.

Do Landlords Need to File a Tax Return?

Yes — if your annual rental income exceeds £1,000 (the property income allowance), you must declare it to HMRC via a Self Assessment tax return. This applies to all types of rental income, whether you own one property or a portfolio, whether you rent long-term or through Airbnb, and whether your property is in the UK or abroad.

Many landlords are unaware of their obligations, particularly those who have recently become landlords or those renting through short-term platforms. HMRC actively cross-references property data and platform information — so undeclared rental income is increasingly difficult to hide and carries significant penalties when discovered.

What Types of Rental Income Must Be Declared?

You must declare all rental income received during the tax year, including:

• Monthly rent payments from long-term tenants

• Income from short-term lets and holiday rentals including Airbnb and similar platforms

• Income from renting rooms in your own home above the £7,500 Rent a Room threshold

• Rental income from overseas property

• Any deposits you retain at the end of a tenancy

• Payments for additional services provided to tenants such as cleaning or gardening

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What Is the £1,000 Property Allowance?

HMRC provides a property income allowance of £1,000 per tax year. If your total rental income is below £1,000, you do not need to declare it. If your income is above £1,000, you can either claim the £1,000 allowance (instead of your actual expenses) or claim your actual allowable expenses — whichever is more beneficial. Accounted4Tax always calculates both options for each client.

What Expenses Can Landlords Claim?

Landlords can offset many allowable expenses against their rental income, reducing their taxable profit and their tax bill. Claimable expenses include:

• Mortgage interest — since April 2020, landlords receive a 20% basic rate tax credit on mortgage interest rather than a full deduction

• Letting agent fees and property management charges

• Property repairs and maintenance — note that improvements are not allowable, only like-for-like repairs

• Buildings and contents insurance premiums

• Ground rent and service charges for leasehold properties

• Accountancy fees for preparing your landlord tax return

• Utility bills paid by you as the landlord

• Council tax paid by you between tenancies

• Advertising costs for finding tenants

• Legal fees for short-term leases under one year

• Replacement of domestic items relief for furnished properties

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Mortgage Interest — How Does the Tax Credit Work?

Before April 2020, landlords could deduct mortgage interest in full from their rental income. Now, landlords receive a basic rate tax credit of 20% on their mortgage interest costs — not a full deduction.

This has had a significant impact on higher rate taxpayers. If you are affected, Accounted4Tax can help you explore alternative strategies, including the use of a limited company structure for property investment.

Should I Hold Properties in a Limited Company?

Many landlords with multiple properties or significant mortgage interest are choosing to hold new property investments through a limited company. This allows full deduction of mortgage interest as a business expense and can result in significant tax savings for higher rate taxpayers.

However, there are important considerations including stamp duty on transferring existing properties, corporation tax rates, and dividend tax. Accounted4Tax provides specialist landlord tax advice and can model the numbers for your specific situation.

Rent a Room Scheme — The £7,500 Allowance

If you rent a furnished room in your own home to a lodger, you can receive up to £7,500 per year tax-free under the Rent a Room Scheme. If your rental income from the room exceeds £7,500, you must declare it via Self Assessment.

Making Tax Digital for Landlords From 2026

From April 2026, landlords whose total income from property and self-employment combined exceeds £50,000 must join Making Tax Digital for Income Tax. Accounted4Tax offers MTD plans from £24 per month and handles all registration, software setup and quarterly submissions for landlord clients.

Get Your Landlord Tax Return Right With Accounted4Tax

Landlord tax is complex — with changing mortgage interest rules, allowable versus non-allowable expenses, and the upcoming MTD changes, getting expert advice is more important than ever. Accounted4Tax handles landlord Self Assessment returns from £99, ensuring you claim every allowable expense and only pay the tax you actually owe. Book a free consultation today or call us on 07563 811938.