New announcement. Learn more

CHARTERED ACCOUNTANTS (ICAEW)

News and advice to help make your property business a success

LANDLORDS FINANCIAL BLOG

All

Landlords Tax Property Tax Landlords Tax Returns Landlords Accounts Property Tax Return Property Accounts Landlords Financial Landlords Accountant Tax Tax Returns VAT Chartered Accountants Online Accountant Online Bookkeeping Online Tax Returns Your Online Accountant Your Online Bookkeeper HMRC Businessadvice Expenses SDLT Accounting FHLs NIC Dividends Property Cashflow Holiday Lets Tax Investment Property Tax MTD PAYE Property Accountant Smallbusiness Tax Implications Tax Relief Businesstips Capital Gains Tax Cgt Employment Allowance Furnished Holiday Lettings Ihtexemptions Income Tax Inheritance Tax Making Tax Digital National Insurance Pension Relief Sole Trader Taxplanning Capital gains tax property Gifts ISA Landlord Repairs Partnership Property bookkeeper Property Letting Tax free income Taxreturn VAT invoice Agricultural Property Relief Allowable Business Expenses Annual Exempt Amount Bad Debt Tax Relief BADR Benefits Benefits in Kind Business Entertainment Business Expenses Business Rate Business tips Capital Allowances Capital Gains Cashbasis Child Benefit Commercial Property Compliance Deductibleexpenses Directors Loans Disincorporation Entertainment Finance Financialmanagement Flat Rate Scheme HMRC complaints Interest Interest Rates Lettings MakingTaxDigital Mileage Allowance Mobilephones MTD Update Overlaprelief Overseas properties Partnershipbusinesses Payrolling Pensioncontributions Postcessationrelief Ppr Property Business Property Company Tax Property Tax Deductible Expenses Propertyallowance Reimbursedexpenses Rent a Room Relief Rental Residence Relief Residential property gains Selfemployed Small Business Stamp duty TimetoPay VAT registration Working from home 2025-26 60 day capital gains limit Abolitionclass2 Accrualsbasis Acquisitions ADR Advisoryfuelrates AI AirBnB Alphabet shares Amap Annual Tax on Enveloped Dwellings Appeal APR Artificial intelligence Assessment Asset disposal Associated Company Associated Company Tax Rules ATED Autumnstatement Bad Debt Baddebts Badgesoftrade Beancounter Benefit Relief Breakeven Point Budget Business advice Business asset deferment Business coach Business Continuity Business Rates Business Rates Relief Businessgrowth Businesstypes Buy or Lease Equipment Buytolet Capital Allowances for Cars Capital Gain Capitalallowances Capitalexpenditure Car Capital Allowances Carry Back Losses Cash Change of Tax Basis ChatGPT CIS Scheme Class 2 NIC Class 3 NIC Common Tenant Companies Expenditure Companies House Company Account Deadlines Company Account Filing Company car Company Strike Off Company Tax Efficient Property Companyassociation Companyloanstaxfree Compulsory Strike Off Construction Industry Scheme Contacthmrc Contentmarketing Contributions Corporation Tax Losses Corporation Tax New Regime Corporation Tax Rates CorporationTax Costs Cryptocurrency Customerlistimplications Deductible Business Expenses Deductions Deferring NIC Demerger Depreciation Development Directors Directors NI Directorsloans Disallowable Business Expenses Discovery Disposals Dispute Resolution Dividend allowance Dividend Allowance Reduction Dividend Planning Dividendallowance DLA Domestic Items Tax Relief Dormantcompany Dwellings EIS Employ a worker Employee Discount Employee management Employeecompensationpayments EmployeeOwnershipTrust Employers NIC Endoflifeplanning Enquiry EnterpriseResourcePlanning Entrepreneurmindset Equity Expenses Allowed For Tax Extrabenefit Eyetests Flipping Formal Complaint Furnished Holiday Lets Tax Gift Aid Gift Allowance Growthhacks Help to pay tax bills HICBC HMO Licensing Fees Holdoverrelief Holiday Lets Holiday Lettings Tax Home responsibilities protection How to apply for a Business Loan How to Extract Profit Humour Hybrid Illegaldividends Income Income and Gains Inflationary Gains Influencers Inheritance Tax Nil Rate Band Interestrelief Interestrestriction Investing Investment Investment in Woodlands Invisible income Invoicing IR35 ITSA Joint Tenant Keypersoninsurance Landlords Self Assessment Late vat registration LBTT Leadgeneration Leadmagnet Leanbusinessmodel Lending Letting Agent Disbursements Letting Agent Recharres Lettings Relief Lifetime Limit Limitedcompany Liquidation Demerger Loan Loaninterest Long Lets Tax Longservice LTT Mainresidencerelief Managed Lets Management accounting Maritalhomedivorce Marriage allowance Marriageallowance Mileage payment Mileage Relief Minimumwage Mixedusesdlt Mortgage costs Mortgage Interest Relief New property Newcompanycarfuelrates Newnicrules NIC 2023 to 2024 NIC savings Nicdisregard Nicreduction NMW Nmwerrors Non Allowable Business Expenses Non-taxable Nudgeletter Off-payrolling benefits Optiontotaxvat Overpayment Relief Paperform Partnership schemes Parttime Patternofoccupancy PAYE by Direct Debit Payroll Penaltypoints Pension Payments Tax Relief Pensions Performance-reviews Periodofgrace Periodsofabsence Personal Allowance Personal Expenses Personal finance Personalallowance Personalguarantees Pretradingexpenses Profit Profit-and-loss ProfitAndLoss Property Allowance Property Development Company Property Incorporation Property Investment Company Property investor accounts Property investor tax tips Property Rental Business Property Trading Propertycompany PRR R40 Receipts Recharges by Estate Agents Refund Regularpayments Relief for additional expenses Relief for FHL Rent your drive Rentaroom Research & Devolopment Residentialsdlt Retail stock control Retainedprofits Revenue Room for rent tax Rti SA Salary Salary Sacrifice Savings SDLT changes Section 455 Tax Section455tax Selective Licences Landlords Self Assessment Self-employednic Selling Online Selling your Company Seperation Servicecharges Settlementslegislation Simplified Expenses Smallbiz Smallbusinessraterelief Software Spring Budget Staffparties Starting a business Student Loan Deductions SuccessJourney Surplus Cash Tax Allowance on Driveways Tax Allowances Tax bill Tax Break Tax Codes Tax Deadlines Tax Deductions Tax Filing Deadlines Tax Free Childcare Tax Free Health Tax on Company Vans Tax on Enveloped Dwellings Tax position Tax Refund Tax Return Tax tips for landlords Tax-free savings income Taxable Benefits Taxation Taxation of savings Taxbillpayments Taxconsequences Taxincentives Taxposition Taxpositionassets Taxrelief Taxreliefs Taxses Terminationpayments Tips Trade professional Trading losses Training Transfer Assets Transfer Assets Between Spouses Travel Uk Properties Umbrellacompany Undisclosedincome Unpaid Rent VAT Bad Debt Relief VAT Deadlines VAT Disbursements VAT flat rate scheme VAT Penalties VAT Reverse Charge Vatpenalties Vatregistered Vatregistrationthreshold Voluntary Class 2 National Insurance Wellbeing Year End

TAGS

Enjoy £1,000 of property income tax-free

June 5, 2025

The property allowance enables individuals to enjoy property income of up to £1,000 each tax year free of tax and without the need to report it to HMRC. This provides opportunities for individuals to earn some tax-free income by letting out their drive where there is an event nearby or letting out their house while on holiday. However, the allowance cannot be used to shelter rent received from a personal or family company for the use of an office in the director’s house.

If total rental income received in the tax year is less than £1,000, there is no tax to pay and the income does not need to be reported to HMRC. The property allowance is available in addition to other allowances such as the personal allowance, the trading allowance, the personal savings allowance and the dividend allowance.

It is also possible to benefit from the property allowance if rental income in the tax year is more than £1,000. The landlord has the option of deducting the £1,000 property allowance rather than their actual expenses when calculating their taxable rental profit. This will be beneficial if actual expenses are less than £1,000.

Where rental income in the tax year is more than £1,000 it has to be reported to HMRC. Currently, the rental income and any associated expenses must be reported on the Self Assessment tax return. However, HMRC have announced that they plan to increase the threshold for reporting property income on the Self Assessment tax return to £3,000 before the end of the current Parliament. While rental income in excess of £1,000 will still need to be reported to HMRC, taxpayers will instead be able to use a new digital service to do so rather than filing a Self Assessment tax return. Where the landlord needs to file a Self Assessment tax return to report other income, they will still be able to report property income in the return – use of the new digital service will be optional.

Where rental income is more than £1,000, the associated rental profit is taxable. If rental income is less than £1,000 but the landlord makes a loss, they may prefer to report their income to HMRC to preserve the loss rather than take advantage of the property allowance.

Tax free income

Landlords Financial

Landlords Accountant