Self Assessment
Self Assessment is HMRC’s system for collecting income tax on your rental income and other earnings. Most individual private landlords running a rental business must register for Self Assessment, file an annual tax return and pay any tax due on profits from private tenancies granted to residential tenants in the Private Rented Sector (PRS).
For landlords, your property pages report total rents received, minus deductible expenses and other revenue expenses such as repairs, agents’ fees, insurance and day-to-day costs of managing a property portfolio. Spending on capital improvements and other non-allowable expenses is treated differently and cannot simply be netted off against this year’s rent. Interest on a buy to let mortgage is now relieved via a tax credit, not a full deduction.
For an overview of the full record-keeping picture that underpins your self-assessment filing, see our entry on landlord accounting.
The Renters’ Rights Act does not replace Self Assessment, but it affects what you spend money on. Meeting higher rental standards, fit for human habitation duties, Awaab’s Law obligations on damp and mould, and energy efficiency rules such as Minimum Energy Efficiency Standards (MEES) and Higher rate efficiency standards (HRAD) will often increase legitimate, usually deductible, running costs. You still cannot pass these on as banned “extras” outside the permitted payments rules.
Accurate records of income and expenditure are essential to stay compliant with both tax and housing regulation.
Also see our landlord blog articles, including:
