Landlord Tax: What You Need to Do Before 31 January

Landlord Tax: What You Need to Do Before 31 January

If you rent out property in England, tax reporting isn’t optional — and 31 January is a key date to have firmly in your diary. This is the annual deadline for submitting your Self Assessment tax return and paying any tax owed for the previous tax year. Whether you’re an experienced landlord or fairly new to property, understanding what income must be declared, what you can deduct, and how payments are calculated can help you avoid penalties and unexpected bills. 

Do landlords need to submit a Self Assessment tax return?

If you receive rental income above £1,000 per tax year, you must declare it to HM Revenue & Customs via Self Assessment.

This applies whether:

• You own one rental property or several
• The property is let long-term or short-term
• The rental income supplements employment, pension or self-employment income

Key deadline: 31 January

By 31 January, you must:

• Submit your online Self Assessment tax return
• Pay any tax owed for the previous tax year
• Make a payment on account for the current tax year, if applicable

Missing the deadline can trigger:

• An automatic £100 penalty
• Daily fines for continued delay
• Interest on unpaid tax

What information do landlords need to provide?

When completing your tax return, you’ll need to declare:

• Rental income*

This is the gross income you received, including:

• Monthly rent payments
• Payments for services (e.g. gardening or cleaning if charged to tenants)
• Non-refunded holding deposits
• Insurance payouts relating to rent

 

• Allowable expenses*

These are costs incurred wholly and exclusively for renting out the property (more on this below).

*If you are a landlord on a fuill management or let and collect package, details of income and expenses processed by us at Brittons Lettings can be found on your landlord statements. Please contact us as soon as possible if you require further copies of any of your statements so that we can forward them to you in good time. 
 

• Other income

Your rental income is added to:

• Salary or wages
• Pension income
• Self-employment income
• Dividends or savings interest

This combined total determines which tax band you fall into.


How rental income is taxed

Rental profits are not taxed separately — they are added to your other income and taxed at your marginal rate.

Income tax bands (England)

Tax Band	Total Taxable Income	Rate
Personal allowance	Up to £12,750	0%
Basic rate	£12.751 - £50,270	20%
Higher rate	£50,271 - £125,140	40%
Additional rate	Over £125,140	45%

Your personal allowance reduces once income exceeds £100,000 and is removed entirely at £125,140.

For example, if you earn:

• £40,000 from employment
• £15,000 in rental profit

Your total income is £55,000 — meaning part of your rental income is taxed at 40%, not 20%.


What expenses can landlords deduct?

You can deduct allowable expenses from your rental income to calculate your taxable profit.

Common allowable deductions include:

• Letting agent fees
• Property management costs
• Repairs and maintenance (not improvements)
• Safety certificates (gas, electrical, EPC)
• Insurance (buildings, contents, landlord cover)
• Replacement of domestic items (like-for-like)
• Ground rent and service charges
• Accountancy fees
• Advertising for tenants

What can’t be deducted?

• Property improvements (e.g. extensions, upgrades)
• Personal expenses
• Capital repayments on mortgages

How and when do landlords pay tax?

Tax is usually paid:

• Online via bank transfer
• By debit card
• Through HMRC’s online account

If your tax bill exceeds £1,000, you may need to make:

• One payment by 31 January
• A second payment by 31 July

These are advance payments towards the next tax year.


With the 31 January deadline approaching, don't leave it too late and risk errors, penalties and stress. Now is the time to review your rental income, check your allowable expenses, and ensure your return is accurate and complete.