Landlord tax in the UK: allowances, expenses and records

If you rent out property in the UK, the rent you receive is income, and you may need to tell HMRC about it. This guide explains in plain English which tax-free allowances exist, what counts as an expense, when you need to report your rental income and which records to keep.

It is general information, not tax advice. Your own position depends on your own figures, so check GOV.UK or ask your accountant before you decide.

In this guide

1. Tax-free allowances for landlords
2. Which expenses you can claim
3. When you need to report rental income
4. Records to keep, and for how long
5. Landlords and Making Tax Digital for Income Tax
6. Keeping landlord books in EasyBooks

Tax-free allowances for landlords

There are 2 allowances worth knowing about. They work differently, so it helps to see them side by side.

GOV.UK says the first £1,000 of your income from property rental is tax-free. If your gross property income is above £1,000, you can use the allowance instead of deducting expenses, not as well as them. If your expenses are more than your income, claiming expenses may be the better choice. You cannot use the property allowance if you claim the tax reducer for finance costs, or for income covered by Rent a Room. If you own a property jointly, each owner has their own £1,000 allowance against their share of the rent. Read the full GOV.UK guidance on the allowances before relying on either one.

Which expenses you can claim

GOV.UK says allowable expenses are the things you need to spend money on in the day-to-day running of the property. For residential lettings these include:

• letting agent fees;
• insurance for the building and contents;
• repairs and maintenance, such as the plumber fixing a leaking pipe;
• utility bills, ground rent, service charges and Council Tax that you pay;
• services such as cleaning or gardening;
• accountancy fees.

Repairs keep the property as it was. Improvements are capital expenses, and capital expenses are not allowable expenses. GOV.UK lists the detail in its landlord tax guidance.

Mortgage interest works differently. For an individual landlord, Income Tax relief on residential property finance costs is limited to the basic rate (from April 2027, a separate property basic rate), so interest is not claimed as an ordinary expense. If you borrow to buy a rental property, ask your accountant how this applies to you.

A landlord with 2 flats might spend £145 on a boiler repair in 1 flat and an £85 letting agent fee for the other. Both are day-to-day running costs, and both belong in the records with the date and a receipt.

When you need to report rental income

For the tax year, which runs from 6 April to 5 April, GOV.UK says you must report your rental income on a Self Assessment tax return if it is:

• more than £2,500 after allowable expenses; or
• more than £10,000 before allowable expenses.

If your property income is more than £1,000 but not more than £2,500, GOV.UK says to contact HMRC. If you need to register for Self Assessment, GOV.UK says to register by 5 October following the tax year in which you had rental income.

These are the main rules, not every case. Use the GOV.UK renting out a property guidance for your own circumstances.

Records to keep, and for how long

Good records make the tax return simple. GOV.UK says to keep records such as:

• rent books and records of rent received;
• receipts and invoices for expenses;
• bank statements.

Keep the income from fully furnished lettings separate from income from unfurnished or part-furnished lettings. GOV.UK says to keep your records for at least 5 years after the 31 January tax return deadline for each tax year.

A simple habit helps: each time rent arrives or a bill is paid, record it on the day. That way nothing waits for the end of the year.

To compare ways of keeping these records, see our checklist for bookkeeping software for landlords.

Landlords and Making Tax Digital for Income Tax

Making Tax Digital for Income Tax is for sole traders and landlords registered for Self Assessment whose qualifying income is over the threshold for their start date. Not everyone who works for themselves is a sole trader, and the other ways of being self-employed are outside these rules for now.

GOV.UK defines qualifying income as your total income from self-employment and property, before expenses. A landlord with £25,000 of rent and £27,000 from a self-employed business has £52,000 of qualifying income. The thresholds are:

• over £50,000 (2024 to 2025 tax year): you use it from 6 April 2026;
• over £30,000 (2025 to 2026 tax year): you use it from 6 April 2027;
• over £20,000 (2026 to 2027 tax year): you use it from 6 April 2028.

The tax year in brackets is the year whose income HMRC looks at for each start date. Use the GOV.UK guidance and checker to see where you stand.

If it applies to you, EasyBooks lets you keep your books and prepares quarterly updates from the supported records on the accounts you map to HMRC categories. There is no second ledger and no need to label each transaction separately for Making Tax Digital. You still set up the accounts, keep complete records and check the figures before you send. EasyBooks supports UK property income. It does not support foreign property income.

Quarterly updates do not replace the tax return. The tax return stays, so you do both, and EasyBooks does not currently send the tax return. Many EasyBooks customers leave that step to their accountant, so agree with yours which EasyBooks reports they need. Read how EasyBooks handles Making Tax Digital for Income Tax.

Keeping landlord books in EasyBooks

If you own more than 1 property, you can see how each one performs without keeping separate books. In EasyBooks you can create a separate account for each property within the same business, and there is no limit on accounts. You can also keep separate books for your personal finances.

EasyBooks is a native app for Mac, iPhone and iPad, and it works offline. You can enter rent and expenses directly, or import records from a spreadsheet as a CSV file on Mac. After the 14-day free trial, which needs no card, you choose a plan. Making Tax Digital for Income Tax is included in Bronze, Silver and Gold.

With each property in view and rent and repairs recorded as they happen, the tax return has records to work from.

Frequently asked questions

Do landlords pay tax on rental income?

Individual landlords may have to pay Income Tax on their rental profit. GOV.UK says the first £1,000 of income from property rental is tax-free, and you can deduct allowable expenses. Whether you need to report the income depends on how much you receive, so check the GOV.UK thresholds.

What is the property allowance?

The property allowance is a tax exemption of up to £1,000 a year on income from renting property. If your gross property income is above £1,000, you can use it instead of deducting expenses, not as well as them. You cannot use it if you claim the finance costs tax reducer, or for income covered by Rent a Room. If you own a property jointly, each owner has their own £1,000 allowance against their share of the rent.

What expenses can landlords claim?

GOV.UK says allowable expenses are the costs of the day-to-day running of the property, such as letting agent fees, insurance, repairs and maintenance, utility bills, service charges, Council Tax you pay, cleaning and accountancy fees. Capital expenses, such as improvements, are not allowable.

Do I need to register for Self Assessment as a landlord?

You must report rental income on a Self Assessment tax return if it is more than £2,500 after allowable expenses or more than £10,000 before them. GOV.UK says to register by 5 October following the tax year in which you had rental income. If it is between £1,000 and £2,500, contact HMRC.

How long should landlords keep records?

GOV.UK says to keep your records for at least 5 years after the 31 January tax return deadline for each tax year. Records include rent books, receipts, invoices and bank statements.

Does Making Tax Digital for Income Tax apply to landlords?

It applies if you are a sole trader or a landlord and your qualifying income, which is your total income from self-employment and property before expenses, is over the threshold. The thresholds are over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028.

Can EasyBooks keep separate records for each property?

Yes. In EasyBooks you can create a separate account for each property within the same business, and there is no limit on accounts. EasyBooks supports UK property income. It does not support foreign property income.

This article provides general information, not accounting or tax advice. Tax facts were checked against GOV.UK on 5 October 2026. Check the latest GOV.UK guidance or speak to your accountant about your own circumstances.