Income from rental property - do I need self assessment?

SparkyG

Until August this year I had no income as I am not in employment or claiming benefits. I recently purchased a flat (no mortgage) for income, and since August have been receiving rent of £1000 per month. The service charge is £1200 a year.


After allowable expenses (I'm not sure what they are, or how I find out), I don't think my annual income will exceed the personal tax allowance. Do I still need to register for self assessment?


I've just spent 20 minutes on hold to HMRC after answering some automated questions, and then gave up!


Thank you in advance for any help.

TheCyclingProgrammer

If you're not in employment, then you only need to notify HMRC if you are chargeable to tax. So no, you don't need to register if you have no tax to pay as you have no legal obligation to notify HMRC of anything.

Be aware that there is a new online tool that you can use to check if you need one on gov.uk but it's misleading, for example it claims you need to register for SA if you're a company director which is just wrong. It also references the limits of £2.5k net and £10k gross for rental income but these limits only apply if you are already on PAYE.

The old HMRC page used to be a bit clearer:
http://webarchive.nationalarchives.gov.uk/+/http://hmrc.gov.uk/sa/need-tax-return.htm

Specifically this bit under income from land and property (emphasis mine):

If you don't pay tax through a PAYE code you’ll need to complete a tax return if all of the following apply:
you have income to declare, for example income from savings, trusts or abroad, rental income from land or property
your total income exceeds your total allowances and reliefs
you have tax to pay on this income

HMRC could potentially send you a request to submit a SA however. If they do you will need to do it.

You can also register voluntarily if you want but I'm not sure why you would want to.

What you should do is keep good records of your rental income and your expenses. If your net profits exceed the personal allowance (which could happen if you get a job) you will have 6 months after the end if the relevant tax year to notify HMRC and you may then need to do a SA.