Posted 25th Jan 2023
I rent a one bedroom property. Income isnt much, after allowances it's under £2.5k. When I check the hmrc website and go through the 'do I need to do a self assessment' because of the amount it indicates I can let them know through the 'report other income' on the PAYE income section online.

My first question is does this sound correct, or should I be doing a self assessment to show the income (£4200) minus allowances?

Secondly, I haven't reported any rental income since starting to let 2018. Can I go in each tax year and make that change or should I go through the Let Property Campaign?
I only work part time, have 3 young children so even with this income and my employment of 2 days a week I will still be under my personal allowance so don't think I should be due any tax.
Thank you.
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  1. Avatar
    I was on a low income, rented out my house as lived with a friend as their carer.
    Rent did not count as income as property was not purchased for rental only it was family home.
    Its a fine line.
    But I had to file a self assessment return each year, Easy to do.
    As income from carers allowance and rent was below £12,570 a year not Tax was payable.
    Going back and reporting it could be a right pain, I would call and ask if you need to file a return this year.
    I think you might not need to do much if anything.
    Read this.
    litrg.org.uk/tax…rty (edited)
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    If you are a non-Scottish taxpayer, the tax rate will be:

    • 0% if your total employment income, other earned income and property income all fall within your personal allowance
    • 20% if you are a basic rate taxpayer;
    • 40% if you are a higher-rate taxpayer; or
    • 45% if you are an additional rate taxpayer.
  2. Avatar
    If your income is: Less than the basic rate threshold of £12,570 – you'll pay 0% in tax on rental income. Above £12,570 and below the higher rate threshold of £50,270 - you'll pay 20% in tax on rental income
  3. Avatar
    You do need to self declare, there is a big push at HMRC targetting all landlords at mo with grace given if you own up early rather than be pursued for extra fees and interest.

    You declare the entire income and then any eligible expenses can be deducted and figure you are left with is your tax liability. Obviously how much tax you pay if any goes on your overall position depending on other incomes, employment etc.

    The reason they have gone targeting is due to no taxes paid and unpaid capital gains tax and declarations. Something else you have to take in with regards rental property
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