Last updated: 14 October 2026
Do you need to declare rental income if you made no profit?
Usually yes. If you’re already in Self Assessment, or your gross rental income is over £1,000 a year, you should report it on the UK property pages of your tax return, even if your expenses mean there’s no profit or you made a loss. Reporting a loss is important, because it can be carried forward and set against future rental profits, cutting tax in later years. If you don’t report it, you can lose the loss.
When you must report
| Situation | Report rental income? |
| Gross rent under £1,000 and no other reason to file | No, the property allowance covers it |
| Gross rent £1,000 to £2,500, no other Self Assessment | Tell HMRC; they may collect tax through your code, but a return lets you claim losses |
| Gross rent over £2,500, or profit over £10,000 | Yes, you must file a Self Assessment return |
| Already filing a return for other reasons | Yes, include the property pages |
| Rent-a-room income under £7,500 | No, unless you want to opt out |
Why report a loss?
- Rental losses carry forward without time limit against future profits from the same property business
- HMRC can only accept a loss if it’s claimed in a return
- Losses are recorded and used automatically in later years
- Mortgage interest that can’t be used because of no profit can also be carried forward as a tax credit
Example
Abdul started letting a flat in June 2026. His rent for 2026/27 is £8,400, but he spent £10,200 on repairs, agent fees and insurance. He files his return showing a £1,800 loss. In 2027/28, his flat makes £4,000 profit, so he pays tax on only £2,200. He also had £3,000 of mortgage interest, which he carries forward as an unused 20% credit.
What expenses count
- Letting agent and management fees
- Repairs and maintenance, but not improvements
- Insurance, ground rent and service charges
- Council tax and utilities while the property is empty between lets
- Accountancy fees
- Replacement of domestic items
Capital vs revenue
The cost of buying the property, stamp duty, legal fees on purchase and improvements are capital. They don’t create a rental loss, but reduce any capital gains tax when you sell.
Making Tax Digital
From April 2026, landlords and sole traders with combined qualifying income over £50,000 must keep digital records and send quarterly updates. The threshold falls to £30,000 in April 2027 and £20,000 in April 2028. Qualifying income means gross rent, not profit.
Registering for Self Assessment
If you need to file and aren’t registered, register by 5 October after the end of the tax year in which you started letting.
Frequently asked questions
Can I set a rental loss against my salary?
Generally no, only against future rental profits.
What if I let a property to family below market rent?
Losses may be restricted, as it’s not a commercial let.
Can I offset losses on a UK and a foreign property?
No, they’re separate businesses.
Do I report if the property was empty all year?
Yes, if you were trying to let it and want to record expenses.
Related: whether landlords need a tax return, setting losses against letting profits and what expenses landlords can claim.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with reporting rental income and losses. See our landlord accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
