Your first landlord tax return

Do you need to tell HMRC?

Start with your total property income for the tax year, before any expenses. The tax year runs from 6 April to 5 April. If you own a property jointly, count only your share.

• £1,000 or less: you do not need to tell HMRC, because the property allowance covers it.
• Between £1,000 and £2,500 a year: contact HMRC.
• More than £2,500 after allowable expenses, or £10,000 or more before expenses: report it on a Self Assessment tax return.
• If you already send a Self Assessment tax return, include your rental income on it.

If you let a furnished room in the home you live in, a different relief may apply. The guide to the Rent a Room Scheme explains it.

Registering for Self Assessment

If you need to send a tax return and have not sent one before, register for Self Assessment by 5 October after the end of the tax year in which you had the rental income. For example, if you first received rent in the 2026/27 tax year, which ends on 5 April 2027, you must register by 5 October in that same calendar year.

The same deadline applies if you registered in the past but did not need to send a return for the previous tax year. Once you are registered, HMRC gives you a Unique Taxpayer Reference (UTR), which you need to file your return. If you tell HMRC after 5 October, you could get a penalty, so register as soon as you know you need to.

Dates that matter in your first year

For a tax year ending on 5 April:

• 6 April to 5 April: the tax year. Rent and costs in this period go on one return.
• 5 October: the last day to register for Self Assessment.
• 31 October: the deadline for a paper return.
• 31 January: the deadline for an online return and for paying the tax you owe, including your first payment on account if one is due.
• 31 July: your second payment on account, if one is due.

If you miss the filing deadline, HMRC charges an initial £100 penalty. After 3 months daily penalties start, and further penalties follow at 6 and 12 months. Tax paid late also attracts interest and late payment penalties.

Records to keep

Keep records from the day you start letting. You need them to fill in the return, and to show how you reached your figures if HMRC asks.

• Rent received: the dates, the amounts and which property it came from.
• Letting agent statements showing the rent collected and the fees taken.
• Receipts and invoices for costs such as repairs, insurance, legal fees and utility bills you pay.
• Your annual mortgage statement showing the interest charged.
• Tenancy agreements and the dates each let started and ended.
• Your other income for the year, such as your P60 or pension statements.

You must keep your records for at least 5 years after the 31 January tax return deadline for each tax year.

Working out your profit and where it goes

Your rental profit is the rent you received minus your allowable expenses, such as letting agent fees, repairs and insurance. Instead of claiming expenses, you can deduct the £1,000 property allowance, but you cannot do both. The guide to the property allowance or claiming expenses shows which gives the lower bill.

Rental income goes on the UK property pages of your Self Assessment tax return, form SA105, which sit alongside the main return. If you file online, you give the same details in the UK property section. Your rent, your expenses and your mortgage interest each go in their own place, and your profit is added to your other income to work out the tax.

Mortgage interest and the Section 24 credit

Individual landlords cannot deduct mortgage interest as an expense. Under the Section 24 rules you get a tax credit worth 20% of the interest instead. On the return, enter the interest as residential property finance costs, not with your other expenses.

The credit is limited by your property profit and your income, so it can be worth less than 20% of the interest you paid. Interest that does not get relief is carried forward to later years. From 6 April 2027 the credit rises to 22%, and property income in England and Northern Ireland is taxed at its own rates, as set out in property income tax rates from April 2027.

Payments on account in plain terms

Payments on account are advance payments towards next year's tax bill. You do not need to make them if your last Self Assessment bill was less than £1,000, or if more than 80% of the tax you owed was collected at source, for example through PAYE on a salary.

Each payment is half of your last bill, due by 31 January and 31 July. If your first bill is £3,000, you pay that £3,000 plus a first payment on account of £1,500 by 31 January, then another £1,500 by 31 July. If the next year's tax turns out higher, you pay the difference as a balancing payment by the following 31 January.

Common first-year mistakes

• Register by 5 October after the tax year ends. Do not wait for HMRC to contact you.
• Count all the rent, including rent your letting agent collected before taking their fees. The fees are an expense.
• Enter mortgage interest as residential property finance costs, never as an expense.
• Claim either your expenses or the property allowance, not both. Choosing the property allowance also means giving up the mortgage interest credit.
• Report only your share of a property you own jointly.
• Keep receipts and statements from the start, and keep them for at least 5 years after the 31 January deadline.
• Set money aside for payments on account, so your first 31 January payment is not a surprise.
• File online by 31 January or on paper by 31 October. A late return costs at least £100.