Are you a landlord in the UK looking to keep more of your rental income? Taxes can reduce what you earn, but don’t worry! With the right tips, you can save money and stay within the law. At JMS Accounting, our CEO Jiten Shah and his team help landlords like you earn more and stress less.
Here are some simple and easy tax tips for landlords in the UK:
1. Claim the Money You Spend on the Property
You can take away some costs from your rental income, so you pay less tax. These are called allowable expenses. Some examples are:
- Fixing things in the property (not big upgrades)
- Letting agent fees
- Landlord insurance
- Utility bills (if you pay them)
- Accountant or legal costs
Just remember: only small fixes count. Big upgrades don’t help with this kind of tax, but they may help when you sell the property.
2. Use the £1,000 Property Income Allowance
If you earn £1,000 or less from rent in one year, you don’t need to pay tax on it. That’s called the Property Income Allowance.
Even if you earn more, sometimes using this allowance saves you more tax than listing your actual costs. You must choose one or the other.
3. Claim for Replacing Furniture or Items
If you replace furniture or things like a cooker or washing machine, you can claim back the cost. This is called Replacement of Domestic Items Relief.
You can claim for:
- Sofas, beds, carpets
- Cookers, fridges, washing machines
- Delivery and fitting costs
But remember: you can only claim for a similar item, not a better or bigger one.
4. Share the Property with Your Partner
If you own the property with your husband, wife, or partner, you might pay less tax. That’s because the rent is split, and if one of you earns less, you’ll pay a lower tax rate.
With the right documents, you can even choose how much of the rent goes to each person. This helps you both save more.
5. Use a Limited Company
If you own many properties or earn a lot from rent, starting a limited company might help. A company pays Corporation Tax, which could be lower than personal tax.
Benefits:
- You can keep money in the company
- You can choose how to pay yourself (salary, dividends, pension)
But be careful: this is better for long-term landlords. Companies need more paperwork, and mortgages can cost more.
6. Use Tax-Free Limits the Right Way
Your rental income adds to any other income you have. That might push you into a higher tax band. But you can plan smartly:
- Share income with your partner
- Plan when to earn and spend money
- Use your full personal allowance (£12,570 each in 2025)
7. Keep Good Notes and Don’t Be Late
To save tax and avoid fines, you need to stay organised:
- Keep all bills and receipts
- Track what you fix or replace
- Send your tax return before 31 January
This helps you stay ready if HMRC checks anything and might help you save even more.
8. Ask for Expert Help
Tax rules can change fast. Talking to a professional is a smart move. At JMS Accounting, we help landlords get the best rental property tax savings and stay safe with the law.
Want to Keep More of Your Rental Money?
Talk to Jiten Shah and the friendly team at JMS Accounting. We’ll help you find every tax-saving tip that works for your situation from allowable expenses to setting up a company.
Let us help you keep more of what you earn and make your property business even better.