A Practical Guide to Tax Returns for Landlords
“Dealing with self assessments and tax returns can be very stressful. But David Roseweir in STZ Accounting made that very simple. He is approachable, efficient and very professional.”
Rental income must be declared to HMRC through a Self Assessment tax return, and getting the numbers wrong can cost you more than you expect. This guide explains exactly what landlords need to declare, what expenses are allowable, and what is changing under Making Tax Digital.
Why landlord tax returns are more complex than most people expect
Rental income is not treated like a salary. HMRC requires every landlord earning above the £1,000 property allowance to register for Self Assessment and file a tax return each year. Many landlords fall into property ownership without ever choosing to become a taxpayer in this sense, which is where the problems start.
The rules have also shifted significantly in recent years. The removal of full mortgage interest relief under Section 24 means landlords can no longer deduct mortgage interest directly from rental income before calculating tax. Instead, a 20% tax credit applies, which leaves higher-rate taxpayers paying substantially more than they did before. If you have not revisited your figures since this change came in, your current tax position may not be what you think it is.
From 6 April 2026, Making Tax Digital for Income Tax becomes mandatory for landlords whose total annual income from property and self-employment exceeds £50,000. Instead of one annual Self Assessment return, you will need to submit quarterly digital updates to HMRC. Read the full MTD guidance on GOV.UK. A further phase from April 2028 will capture landlords earning over £20,000.
Where most landlords go wrong with their tax returns
The most expensive mistakes in landlord tax returns are not dramatic errors. They are small omissions repeated every year: expenses never claimed, records never kept, allowances never checked. Over five years that adds up to a material overpayment to HMRC.
Claiming the wrong expenses
Allowable expenses include letting agent fees, property repairs and maintenance, insurance, accountancy fees, and some travel costs related to managing the property. Capital improvements, such as building an extension or upgrading a kitchen to a higher standard than before, are not allowable against rental income in the same way and are treated differently for Capital Gains Tax purposes. Mixing these two categories up is one of the most common issues David sees when picking up accounts from new clients.
Not registering for Self Assessment
If you started receiving rental income and did not register with HMRC, you are already late. HMRC expects landlords to notify them of a new income source by 5 October following the end of the tax year in which the income began. Failing to do so can result in penalties. If this applies to you, the right move is to get registered and file as soon as possible, because voluntary disclosure is treated more favourably than an HMRC discovery.
“Most landlords I work with have been doing something slightly wrong for years, not through negligence but because the rules are genuinely complicated and nobody told them otherwise. The good news is that once we get your records straight, the process becomes very manageable.”
How to complete a landlord tax return (step by step)
The process is straightforward once you know what information to gather. The key is having your records in order before you start, rather than trying to reconstruct the year from bank statements at the last minute.
- Gather your rental income figures for the full tax year (6 April to 5 April). This means every payment received from each tenant across all properties, including any non-refundable deposits kept.
- List every allowable expense you paid during the year. Keep receipts or bank records for each one. Categories include letting agent fees, repairs, insurance, mortgage interest (for the 20% tax credit calculation), and professional fees such as accountancy.
- Log into your HMRC Government Gateway account and complete the SA105 supplementary pages alongside your main SA100 Self Assessment return. The deadline for online submission is 31 January following the end of the tax year. Any tax owed must also be paid by that date to avoid interest charges.
If you are approaching the MTD threshold (total income from property and self-employment above £50,000), you will need to register and begin quarterly digital reporting from the 2026/27 tax year onwards. HMRC has confirmed that 864,000 sole traders and landlords are affected by this first wave. Quarterly updates replace neither the annual return nor the requirement to pay tax on time.
DIY versus using an accountant: what it actually costs
Filing your own landlord tax return is technically possible if your situation is straightforward: one property, no mortgage, no shared ownership, and no other income sources to consider. The moment you add a second property, a mortgage, jointly owned assets, or income from employment or self-employment, the interactions between different income sources and allowances become harder to get right without professional guidance. Getting it wrong means either overpaying tax year after year, or underpaying and facing an HMRC enquiry later.
| Option | Pros | Cons |
|---|---|---|
| DIY Self Assessment | No accountancy fee; fine for very simple cases | Easy to miss allowances; errors can trigger HMRC penalties |
| Using an accountant | All allowances claimed correctly; deadlines handled; peace of mind | Annual or monthly fee applies |
How to get your landlord tax return sorted today
Whether you are filing for the first time or catching up on missed years, the first step is the same: get your income and expense records into one place. You do not need to have everything perfect before you speak to an accountant. David works with landlords at every stage, from total disorganisation to those who just want a second pair of eyes on figures they have already prepared.
- List every property you own that generates rental income and note the total rent received in the 2025/26 tax year (6 April 2025 to 5 April 2026).
- If your total income from property and self-employment is above £50,000, check whether you need to register for Making Tax Digital for Income Tax before the April 2026 deadline.
Ready to sort your landlord tax return?
David handles Self Assessment returns for landlords at a fixed price, claiming every allowable expense and filing on time. There is no tie-in and you will always deal with David directly.
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AAT qualified accountant based in Strathaven. Personal, one-to-one accounting for small businesses and sole traders across the UK.
