If you receive rental income from properties that you let out, you will need to tell HMRC about it on the property pages of your self-assessment tax return. The exception to this is where you let a furnished room or rooms in your home and the income that you receive is below the rent-a-room limit (£7,500 a year where one person receives the income and £3,750 where it is received by two or more people), or if your total income from property is less than the £1,000 property allowance.
You will need to file your 2021/22 tax return (covering property income for the period from 6 April 2021 to 5 April 2022) online by midnight on 31 January 2023. Any tax that you owe for 2021/22 must be paid by the same date.
If you also have PAYE income and want HMRC to collect the tax that you owe on your property income through PAYE by adjusting your 2023/24 tax code, you will need to file your online return by 30 December 2022 unless you have already filed a paper return by 31 October 2022.
Details of income from UK property are provided on the property supplementary pages (SA105) to the return. By indicating that you have property income, the pages will be generated in the online return for you to complete. The information that you will need to provide will depend on the nature of your rental income. You will need to tell HMRC how many properties you let out, whether any of your let properties are jointly-owned and whether you are claiming rent-a-room relief.
Furnished holiday lettings
If you have income from furnished holiday lettings in the UK or EEA, you will need to complete the furnished holiday lettings section. You will need to tell HMRC the amount of rental income you received, details of property expenses (such as rent paid, insurance, repairs; loan interest and other financial costs; legal, management and professional costs; and other allowable expenses). If you are claiming capital allowances, you will need to claim these on the form by entering the amount you are claiming in the relevant box. You will also need to work out your profit or loss. If you have losses from previous years, you can also claim loss relief.
If you have property income other than from furnished holiday lettings, this is entered in the property income section. You will need to provide details of your rental income and expenses and calculate the rental profit. If you have replaced domestic items, you can claim relief for the replacement cost in the appropriate box.
Care must be taken in relation to property finance costs. You cannot deduct finance costs relating to residential lets; instead, relief is given as a tax reduction. Loan interest relating to residential lets should be entered in box 44 not box 26 to ensure relief is given correctly.
Notes on completing the property income pages can be found on the Gov.uk website. It is advisable to read the notes before completing the return and make sure that all required information is at hand.
If you would like to speak to member of our team about your self assessment tax return or any other tax advice, we would be delighted to help. You can get in contact by using our contact form, or you can call our office on 01326 660022.