United Kingdom · expenses
Rental expenses under NRLS and Self Assessment
Why the withholding calculation and the final property-business result may differ.
Updated
Direct answer
Under the Non-resident Landlord Scheme, your letting agent, or your tenant if there is no agent and the rent is over £100 a week, deducts basic-rate tax (20% in 2026-27) from the rent after the expenses they have paid, unless HMRC has approved you to receive rent gross. That withholding is a payment on account, not your final bill: the Self Assessment return works out the actual liability, which can be nil if you are entitled to the £12,570 Personal Allowance as a British or EEA citizen. Compare the five countries on our rate table.
Working route
Collect the full property ledger
Keep rent, agent statements, repairs, insurance, professional fees, finance records and periods of personal use.
Keep withholding evidence
The annual certificate shows tax already deducted and is separate from the expense ledger.
Distinguish repairs from capital work
Improvements and acquisition costs should not be treated automatically as current rental expenses.
Hard stop
Finance-cost restrictions, mixed use, furnished holiday treatment, capital improvements and company ownership need tailored treatment.
Related routes