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What is Rental income?
Last verified 31 October 2026
Rental income is the money you receive for letting out property. HMRC counts rent from tenants and also payments for the use of furniture or for extra services such as communal cleaning, hot water, heating and repairs.
Why it matters to landlords
Tax is charged on your profit, which is your rental income minus allowable expenses, so the headline figure is not what you are taxed on. It still matters for thresholds. For Self Assessment you must file a return if rental income is over £2,500 after allowable expenses, or over £10,000 before them. Under Making Tax Digital for Income Tax, qualifying income is the gross figure before expenses, and for joint property only your share counts.
Income from all your UK properties is added together as one business, while property abroad is kept separate. The first £1,000 of property income in a tax year can be tax free under the property allowance, but you cannot also deduct expenses against it. Keep furnished and unfurnished lettings apart in your records.
Example
Dev lets two flats, one at £700 a month and one at £850 a month, for the full year, so rent is £18,600. He also charges the tenants £600 a year for a cleaner of the shared hallway. His rental income is £19,200, and expenses are taken off afterwards to reach the profit.
MTD Qualifying Income: What Counts Towards £50,000 →