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Landlord Tax Return Guide for Cambridgeshire Landlords

Name: Landlord Tax Return Guide for Cambridgeshire Landlords
Brand: Progressive Lets
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By Wayne Beecham | Created on 2nd June 2025

Cambridgeshire is an excellent place to invest in buy-to-let property because it combines reasonable prices with a high demand for rental property. As a result, Cambridgeshire landlords will generally make healthy rental profits.

If you’re new to renting out property, registering for self-assessment and completing an annual tax return are some of the tasks that come with your new role and can sound daunting if you’ve not been self-employed before.

Completing your landlord tax return is relatively straightforward as long as you are clear on the deadlines and take an organised approach to your property business. To help you, we’ve pulled together a step-by-step guide to filling in your landlord tax return.

What Tax Do Landlords Need To Pay?

Landlords may need to pay the following types of tax:

Income Tax
National Insurance
Stamp Duty
Capital Gains Tax (CGT)

Landlords who personally own their properties need to pay income tax on their profits. How much tax you pay will depend on how much profit you make from renting out your property and which tax band you fall into.

Income tax and national insurance contributions are paid via self-assessment. Read more below about when landlords should pay national insurance.

You may need to pay other taxes as a landlord, such as capital gains tax if you sell one of your properties and stamp duty when you buy a new property.

Landlords who run their business as a limited company will pay corporation tax.

How Much Income Tax Do Landlords Pay On Rental Profits?

The income tax you pay as a landlord depends on your total taxable profit from renting the property and other income streams you may have, such as employment.

The following income tax rates apply:

If you earn under £12,570 then you won’t have to pay tax.
If you earn between £12,571 and £37,700 you will pay the basic tax rate of 20%.
If you earn between £37,701 and £125,140 you will pay a higher tax rate of 40%.
If you earn over £125,140 you will pay tax at the additional rate of 45%.

When you are calculating how much tax you owe on your rental income, you combine your rental income with other income such as your salary from employment. This could tip you into a higher tax bracket, for example, if you earn £35,000 and have a rental income of £10,000, you will fall into the 40% tax rate, as your combined income is £45,000.

In this scenario, you would pay 20% on the amount up to £37,000 and 40% tax on the amount that is above the £37,000 threshold.

Using an online tax calculator can help ensure you calculate your tax obligations correctly.

Tax Free Property Allowance

If your rental income (before expenses) is £1,000 or less, then you do not have to declare it to HMRC and will not pay tax on it.

As a landlord, your rental income is likely higher than this. In this case, you can choose to deduct the £1,000 property allowance from your rental income rather than actual expenses when calculating your taxable rental profits. Your choice will depend on the value of your costs. If they are few, it may be beneficial to claim your property allowance.

When Do Landlords Need To Pay Income Tax Through A Self-Assessment Tax Return?

Currently, landlords must register for self-assessment by 5th October in the second year of becoming a landlord. Then they must submit their self-assessment by the following dates:

If you submit your tax return in paper form, this must be completed by 31st October.
If you are filing your tax return online, you have until 31st January to submit your return and pay the income tax owed.

You could be subject to a hefty fine if you do not submit your self-assessment tax return on time.

However, once the Making Tax Digital initiative comes into effect in April 2026 (which we cover below), landlords with a qualifying income will need to submit quarterly updates on their expenses and income.

Making Tax Digital – Changes For Landlords

The government is introducing a digital tax system through an initiative called Making Tax Digital (MTD), with the first phase starting from April 2026. The changes will move away from paper-based tax submissions to replace them with a digital system.

Making Tax Digital’s key benefits are reducing tax return errors, making it easier for taxpayers to meet their obligations and reducing admin costs for HMRC.

From 6 April 2026, landlords with qualifying income over £50,000 will be required to submit their self-assessment using authorised MTD software.

Then, from 6 April 2027, landlords with qualifying income over £30,000 will be required to submit their self-assessment digitally.

In the 2025 Spring Statement, the government announced that those with a qualifying income of over £20,000 will also need to submit their self-assessment using MTD software from 6 April 2028.

Those affected will be required to submit quarterly updates, as opposed to just doing annual returns. The new quarterly deadlines from April 2026 will be:

7 August
7 November
7 February
7 May

What About Non-Resident Landlord Tax Returns?

For landlords living abroad who are part of the Non-resident Landlords’ Scheme (NRLS), tax payments are made by the letting agent or tenant. Under the NRLS, tax payments must be made before rental income leaves the UK.

Typically, this involves the letting agent deducting the payable tax and making the payment to HMRC. In some cases, tenants are required to make the payment to HMRC.

Letting agents and tenants must complete quarterly tax returns using form NRLQ by the following deadlines each year:

30 June
30 September
31 December
31 March

Do I Need A Landlord Tax Return Accountant?

There is no legal requirement for landlords to use an accountant to complete tax returns. However, with more complex tax submissions, such as when you are completing returns for multiple properties, using an accountant will help ensure submissions are correct.

When managing multiple properties, the income and expenses for all properties can be added together. This means that losses on one property could be offset against profits on another. Using an accountant will help to maximise tax efficiencies, using all the applicable tax deductions and allowances.

Do Landlords With Limited Companies Submit A Self-Assessment Tax Return?

Some landlords set up their property business as a limited company. In this case, their rental profits are taxed through corporation tax rather than personal income tax. These landlords will not need to submit a self-assessment tax return for their rental income. The corporation tax rate is currently 25% for businesses with taxable profits exceeding £250,000. Companies earning less than this will be subject to a 19% corporation tax rate.

Landlords with limited companies will also need to pay dividend tax on the dividends they take and income tax (via PAYE) on their salary.

Do Landlords Pay National Insurance?

If you rent your property as a business, you must pay ‘Class 2 National Insurance‘ if your rental profits are over £6,725 per year. Your rental property is considered a business if all the following apply:

it is your main job
you rent out more than one property
you are buying new properties to rent out

If your rental profits are less than £6,725, you can make voluntary class 2 national insurance payments to ensure you are eligible for the full state pension.

Landlord Tax Returns – Step By Step Guide

Step 1 Register For Self-Assessment

You must register for self-assessment by 5th October, following the tax year in which you received the rental income, or you could face a fine.

When you register, you will be given a unique Government Gateway user ID and password to manage your tax account on the HMRC website and app. Be careful of any sites other than gov.uk that offer to complete the process; they may be fraudulent or charge you fees for something you can easily do yourself.

Step 2 Get Your Paperwork In Order

Get organised with an orderly system to file and store all financial information and records. These include details of your income (a spreadsheet showing monthly rent can help with this) and the expenses you need to deduct. It’s easier to do this from the start of your first tenancy rather than have to assemble all this information with the tax return deadline looming.

You might find it helpful to use landlord-specific software and apps to help you manage this information.

Step 3 Have Everything You Need To Hand

To complete your tax return, you will need the unique taxpayer reference UTR number supplied by HMRC when you registered for self-assessment. Keep a note of it somewhere safe so you know where to find it when needed.

You will also need:

The dates you let out your property.
Details of all the money you’ve spent.
Details of all the rents you’ve received.
HMRC may require these documents to support your return:
Lease or letting contracts.
Rent books.
Receipts.
Invoices
Bank statements.
Mileage logs (for journeys that are solely for your property company purposes).
Cost of the vehicle used for the property company and its CO2 emissions.
For furnished holiday lettings and commercial premises, the costs of any other capital items used in the property.
All documents relating to your purchase of the property.

Step 4 Calculate Allowable Expenses

Landlords can deduct their costs to calculate taxable income. These are costs which must be wholly related to property rental, examples of allowable expenses include:

Property repair and maintenance costs (but not improvements).
Professional fees, such as accountant and letting agents’ fees.
Landlord insurance.
Advertising costs.
Utility bills and council tax, if you pay these.
Service charges & ground rent, for leasehold flats.
Cleaning or gardening cost you pay for.

And landlords can claim replacement of domestic items relief, such as:

Beds.
Sofas.
Curtains.
Carpets.
Fridges.
Crockery and cutlery.

You must have bought these items for use by tenants in a residential property, and the old items must no longer be in use.

Mortgage interest is not an allowable expense. Instead, you can claim a 20% tax credit on mortgage interest repayments. Read more about allowable expenses for landlords at gov.uk.

Step 5 Check The Deadlines

You must remember to file your tax return and pay any tax you owe on time. The deadlines are:

31st January following the end of the tax year for online returns (which most people use) or
31st October for paper returns.
Submit your tax return as soon as possible to avoid being caught out and missing the deadline.

As mentioned earlier in this article, there will be deadline changes for landlords with qualifying income when Making Tax Digital is introduced. Instead of submitting just one annual return, quarterly updates will be required.

However, there will still be one annual deadline for payments (31^st January following the relevant tax year).

Step 6 Fill In The Landlord Tax Return

Filling in your online tax return is a logical process, so work through the return, answering the questions which apply to you as a landlord. As you fill in the form, it will remove any sections not relevant to you.

You must fill in the UK property section, which includes questions about rental income, other receipts from UK land or property, and income from letting furnished rooms in your home.

If anything is unclear, don’t just guess. Check the gov.uk website, contact HMRC or consider using an accountant.

Step 7 Pay Your Landlord Tax Bill

Once you have filed your return, HMRC will calculate the tax you owe. If you file online, you can see what you owe under ‘View your calculation’.

If your bill is more than £1,000 you will usually be asked for payments on account. These are advance payments towards your next year’s tax bill.

You must make two payments on account every year, usually due by midnight on 31 January and 31 July.

If you still have tax to pay after you’ve made your payments on account, you must make a ‘balancing payment’ by midnight on 31 January of the next year.

Ensure your payment reaches HMRC by the deadline to avoid paying interest and a penalty for late payment.

Same-day payments can be made:

Through your online bank account.
Online or telephone banking (Faster Payments).
CHAPS.
By debit or corporate credit card online.
At your bank or building society.

Are you a landlord in the Cambridgeshire area? For help or guidance about any aspects of the tax return process, please give us a call. We’d love to tell you more about our services for landlords and see if we can help – which becomes all the more necessary if you’re building a property portfolio.

We also source, convert, refurbish, dress, market, list, let and manage properties within a 50-mile radius of Peterborough, covering towns and cities such as Northampton, Stamford, Wellingborough, Kettering, Huntingdon, Wisbech, Corby and surrounding villages.

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Wayne Beecham

Wayne is East Midland’s answer to property management. His hard work and high standards of service have gained him a fierce reputation within the regional lettings market. He knows what it takes to own and manage a profitable portfolio himself, because he is not only a successful investor and landlord, but co-founder and “hands on” managing director of Progressive Lets.

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