Now, a landlordship is entitled to an individual via inheritance, purchasing or transferring of ownership. However, becoming a landlord in the UK comes with some crucial legal responsibilities. As properties in the UK are subjected to financial risks and obligations under rental income tax UK guidelines.
That’s why we brought this guide covering key steps that every landlord in the UK must follow. It also highlights the tax duties and the HMRC landlord rules. Apparently, these critical checks are mandatory before letting your tenants move in.
Are you a Landlord?
Yes, if you are renting out properties for income. It is also applicable if you are renting out your home during certain parts of the year. So, once you receive your rental incomes, you must adhere to all the legal and tax rules applicable to property owners.
Do you need permission to rent out?
Now if you have standard residential mortgages, you will need prior consent from your lender. Short-term lettings will be approved easily. Whereas, long-term lettings require a buy-to-let mortgage.
Besides, leasehold properties may require written consents from freeholders. So, always check the local council regulations. As some locations require landlords to register themselves first.
Licences and Insurance
Meanwhile, if you are renting to five or more people from different households sharing the facility. Then you need an HMO license for sure.
Also, you will require a landlord insurance policy covering your building, emergency videos and rent-guarantee protection.
How much rent can you charge?
Firstly, conduct research across similar properties and real-estate properties. So, always check your costs based on mortgage payments, repairs and vacant periods.
Do landlords pay tax on rental income?
Yes, you must be paying tax on the profit you are earning from your property.
Meanwhile, if your rental income is not taxed at the source, then you have to complete self-assessment for rental income every year. Need help filing your landlord tax return? Tax Simba's certified accountants can handle your self-assessment with complete accuracy for just £120, ensuring all allowable expenses are properly claimed.
Additionally, you can also reduce your tax bill by claiming allowable expenses for landlords, like:
- Letting agent fees
- Insurance Charges
- Repairs and maintenance costs
- Utilities and council tax (but only if you are paying them)
- Accountant fees
- Services related charges to finding new tenants
Making Tax Digital for landlords
Most importantly, if your combined earning from properties and self-employment are exceeding £50,000. Then you have to follow the MTD for Income Tax from April 2026. Confused about whether you need Self-Assessment or MTD? Our comprehensive guide on Do I Need Self-Assessment or MTD for Income Tax UK? explains the differences and requirements in detail.
Furthermore, the threshold will be reduced to £30,000 and £20,000 in the following years. Consequently, it will assist in digital record-keeping and quarterly updates.
Meanwhile, if you are living overseas, you have to follow the rules of the Non-Resident Landlord Scheme. For that, you can refer to HMRC's official property income guidance or seek advice from a specialist accountant.
Conclusion
Summing up, being a landlord in the UK requires you to meet safe guidelines and legal standards extensively. All the tax obligations must be under rental income tax UK guidelines. With the right checkers and guidance, you can easily manage your properties with full compliance.
Therefore, let TaxSimba guide you every step of the way.