Rental income over £1,000 a year generally needs declaring to HMRC — and for landlords with a job or a trade besides, the property pages are where January gets painful. Here's the shape of it, in plain English.

What you declare

Your total rents for the tax year, minus allowable property expenses, gives your property profit. If your gross property income is under £1,000, the property allowance usually covers it entirely; above that you either claim the £1,000 allowance or your actual expenses — whichever is better for you (never both).

Allowable property expenses

  • Repairs and maintenance — fixing, not improving (a like-for-like boiler is a repair; an extension isn't).
  • Letting agent fees and management charges.
  • Landlord insurance — buildings, contents, rent guarantee.
  • Gas safety certificates, EICRs, EPCs and licensing fees.
  • Ground rent, service charges, and council tax/utilities during voids you covered.
  • Accountancy for the rental business, and mileage for property visits.

Mortgage interest — the 20% credit

For individual landlords, residential mortgage interest is no longer deducted from rental income. Instead you get a basic-rate (20%) tax credit on the interest — which can push higher-rate taxpayers into more tax than the old rules. The interest figure still needs recording accurately all year.

MTD reaches landlords too

Making Tax Digital applies to landlords on the same phased thresholds as sole traders — combined qualifying income over £50,000 from April 2026, £30,000 from 2027. Digital records of rents and expenses, quarterly updates, final declaration. A tradesperson with a rental property counts both incomes toward the threshold.

This article is general information for UK sole traders and subcontractors, not tax, accounting or financial advice. Rules change — check current HMRC guidance or speak to an accountant about your own position.