Rental business
A rental business is the ongoing activity of letting property to residential tenants in the Private Rented Sector (PRS) to generate rental income, rather than holding property purely for personal use. For tax, HMRC treats most individual landlords as running a UK property rental business, even if they only have one buy-to-let mortgage or are a small landlord.
A rental business means:
Treating each private tenancy or assured tenancy as part of one overall operation, with shared tenancy conditions, policies and systems.
Recording rent payments, deductible expenses, revenue expenses and capital improvements so that accounts and tax returns are accurate.
Recognising that you are subject to a full regulatory framework, including rental standards, fit for human habitation, Awaab’s Law, energy efficiency rules such as Minimum Energy Efficiency Standards (MEES) and Higher rate efficiency standards (HRAD), and restrictions on permitted payments and prohibited payments.
Under the Renters’ Rights Act, a rental business also means engagement with the sector’s infrastructure, including joining the Private Rented Sector Ombudsman, registering on the PRS Database, cooperating with the Local Housing Authority (LHA) on licensing, for example an HMO licence, and property inspections, and using lawful possession grounds if you need to regain possession.
Also see our landlord blog articles, including:
