Property & HMRC

Property Income should be disclosed to HMRC within 6 months of the end of the tax year in which a landlord started letting, therefore by 5 October to avoid penalties.

What is Property Income?

Property income is any income from land or buildings and includes renting furnished or unfurnished residential or commercial property, holiday lets and even letting part of a landlord’s home to a lodger.  This does not include hotel, guest house or B&B facilities.

When a landlord decides to let a property, their lettings business begins as soon as they receive their first rent or from the date that the tenants lease begins, whichever comes first.

Informing the HMRC

Call the self assessment helpline if the landlord’s rental profit is more than £2,500.00, or their rental income is more than £10,000.00 and register for self assessment.  It is quicker to register property income using HMRC online services.  If the rental profit and income is less than this then landlords can call the helpline to report it.

HMRC should be informed of property income regardless of whether they are making a profit or loss on the property, a loss simply means they will have no tax to pay.

The registering process can take up to 20 days to complete.

It important for landlords to keep a note of the 10 digit Unique Taxpayer Reference number (UTR) and their user ID to log in Online.   They will receive an activation code through the post which has to be activated within 28 days of receipt otherwise the code will expire.

HMRC will ask a landlord to complete a self assessment tax return each year to complete.

Any tax that they are liable for can be paid in two ways; 1. paying a bill or 2. placing a restriction on their tax code, this will depend on their personal circumstances and the amounts of tax owed.