Common mistakes UK landlords make

1. Not declaring retained deposits

When you keep some or all of a tenant's deposit at end of tenancy (for damage, cleaning, or unpaid rent), the amount you retain is rental income in the year you retain it. Many landlords forget this.

2. Treating improvements as repairs

The most common HMRC enquiry trigger. A new kitchen with extra units, an extension, or a converted loft is capital — not deductible from rental income. Get this wrong and you face back tax plus penalties.

3. Ignoring the Section 24 finance cost restriction

Mortgage interest is no longer a rental expense for individual landlords. If you're still entering it as one on your tax return, your profit is being understated and HMRC will eventually notice. Use the dedicated finance costs box and let the system apply the 20% credit.

4. Missing the 60-day CGT reporting deadline

If you sell a UK residential property at a gain, you must report and pay the Capital Gains Tax within 60 days of completion — separately from your Self Assessment. Late filing penalties apply automatically.

5. Not keeping pre-letting expense records

Expenses incurred up to seven years before a property is first let can sometimes be claimed as pre-trading expenditure. Without receipts, you cannot claim them. Keep refurbishment and set-up records from the start.

6. Failing to apportion mixed-use costs

If you use part of your home for landlord admin, or your car partly for property visits, you can claim a fair proportion of the cost. Many landlords either claim nothing or claim too much. Keep a simple usage log to support whatever you claim.

7. Forgetting jointly-owned property splits

If you own a property with a spouse or partner, the income and expenses are split according to ownership share by default — usually 50/50 for joint legal ownership. You can vary this with a Form 17 declaration if beneficial ownership differs, but only with proper documentation.

8. Not filing on time when there is no profit

A common myth: if you have no rental profit, you do not have to file. Wrong. If HMRC has asked you to file Self Assessment, you must — the late filing penalty (£100 minimum) applies regardless of whether there is tax to pay.

How to avoid these mistakes

• Keep records as you go, not at year-end
• Treat the receipt-and-invoice description as your evidence — get contractors to be specific
• Review your tax return before submitting; the Section 24 box catches most people the first time
• Get a one-hour review with an accountant before your first or second filing — it pays for itself