You may need to complete a Self Assessment tax return if you let a property or a room in your home and receive income from renting. This also applies if you are not a UK resident but get income from renting out property in the UK.
If your gross income from renting property is less than £1,000 you do not have to report it.
If your gross income is more than £1,000 but less than £2,500 you must notify HMRC. If the profit from renting property is over £2,500 you must register for Self Assessment by 5 October following the end of the tax year.
You are allowed to claim a deduction for any expenses you have paid for on the property, but there are some restrictions. Read HMRC’s guidance before completing your return.
An alternative to claiming specific expenses is to claim the Property Allowance. If you claim this you can deduct £1,000 from your rental income. You not need to keep any records of anything you actually spent. You would only want to do this if what you actually spend is less than £1,000.
Rent a Room.
If you are renting out a furnished room in the house where you live, the income may come under the Rent a Room scheme.
If the gross income is less than £7,500, you do not have to report the income or pay tax on it. There is more information on Rent a Room on the government website.
The documents you’ll need.
You will need a summary of your gross rental income for the year. This is the amount you have received without taking away any of your expenses.
If you claim any expenses, you should keep copies of invoices and other documents relating to the expense.