10 tips for buy-to-let landlords filing a 2022-23 tax return

Learn about the key thresholds, deductions and tax rules for landlords

10 tips for buy-to-let landlords filing a 2022-23 tax return
Time is running out for landlords to file their self-assessment tax returns for the 2022-23 tax year. 

The deadline is midnight on Wednesday 31 January, and if you don't file on time, you'll be hit by an automatic £100 fine. 

This means it's best to file with plenty of time to spare. Here, we share our top tips on submitting your tax return.

Which? tax calculator


Our jargon-free tool can help you tot up your tax bill and send your tax return directly to HMRC.

Calculate your tax bill

1. Find out if you need to file a return


This depends on how much money you brought in from buy-to-let between 6 April 2022 and 5 April 2023.

You're entitled to receive £1,000 in rental income each year without paying tax on it.

This is called your property allowance, and it applies across your portfolio as a whole, not per property. 

If you received between £1,000 and £2,500 in rental income, you'll need to contact HMRC to check if you'll need to complete a return. 

If you received more than £2,500, you'll need to register for self-assessment and submit a tax return. 

  • Find out more: self-assessment tax returns

2. Work out your taxable income


If you're an individual landlord (your properties are owned in your name, rather than via a company), your buy-to-let profits will be taxed at the same rates as employment income. 

The income tax bands for the 2022-23 tax year were as follows:

  • Tax-free: £0 to £12,570 – 0%
  • Basic rate: £12,571 to £50,270 – 20%
  • Higher-rate: £50,271 to £150,000 – 40%
  • Additional rate: £150,001-plus – 45%

Rates and bands differ in Scotland

How to calculate your bill


When calculating your tax bill, you'll need to add your rental profits to other income you earned during the tax year.

For example, if you earn £45,000 in your day job, you'll pay tax on the money earned above £12,570 at the basic rate of 20%.

If you then add £15,000 in rental income (making a total of £60,000), this would push you into the next tax bracket.

This means you'd pay 20% on your income between £12,571 and £50,270, then 40% on the remaining £9,730.

3. Deduct your expenses


When filing your return, you're allowed to deduct expenses you've 'wholly and exclusively' incurred in the process of letting properties.

Commonly, this includes outgoings such as letting agent fees, landlord insurance premiums and accountancy.

Maintenance and repair costs can also be deducted, as can the cost of replacing furniture and white goods in furnished properties – though replacements need to be like-for-like. 

Utility bills and council tax payments can only be deducted if the tenancy agreement specifies that you are responsible for paying the bills, not the tenant. 

  • Find out more: tax-deductible expenses

4. Keep track of small costs


Over the course of the year, you're likely to have incurred lots of minor costs, some of which you'll have forgotten about entirely.

The good news is that if you have kept records, minor outgoings such as the cost of phone calls to tenants and travelling to rented properties can be deducted.

One word of caution. As well as having receipts, you'll need to be able to evidence these costs were incurred exclusively for business use.

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Meet Our Founding Director James

James Allen is the founding director and owner of Allen Residential. James started in estate agency back in 1997 and after working for a couple of strong independent estate agencies he established Allen Residential in 2005 Keen to invest back into his team, James is dedicated to ensuring that each team member at Allen Residential is a key part of the business, emphasizing the importance of their contributions. His leadership style highlights the significance of a cohesive and dedicated team, fostering a supportive and growth-oriented environment. The business has flourished in recent years, thanks to the staff's commitment to excellence and the implementation of effective systems. James' appreciation for his team’s hard work and dedication is evident, making Allen Residential a thriving and dynamic company.

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