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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Rule property rental income

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Rule for declaring property rental income. I read somewhere that if the net proceeds of rental income did not exceed around £2,000 per in the tax year then rental income does not have to be declared to HMRC. Can you please shed some light on this? (Net proceeds = rental income less allowable expenses)


I'm afraid that isn't correct and it's a common misinterpretation of the rules made by many people.

If your net profit from letting property is less than £2,500 and the gross letting income before expenses is less than £10,000 for a tax year and you have a PAYE source of income, you can have the tax due on the rental income collected through your tax coding as opposed to completing a self assessment tax return and paying the tax directly. Even if you have £1 of rental profit it is taxable.

Take a look at the questionnaire here to determine whether you need to complete a tax return for any one tax year.

I hope this helps but let me know if you have any further questions.
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