The general answer is YES, but there are certain exemptions.
If you are on PAYE and have a gross rental income of less than £10K a year, with net profits of £2500 or less a year, you have an option where you don’t have to register for a self-assessment tax return with HM Revenue & Customs. But, You will have to make a declaration in writing to HM Revenue & Customs and request them to collect taxes through PAYE or Tax Code.
What if the property is Jointly Owned ( say – 50/50)
The above threshold is for each individual, If you have a combined rental income of £19500 and net profits of £4,950 a year, it means each of you, will have a gross income of £9750 and net profits of £2,475. It means you will qualify to declare rental income through a declaration and without registering for a self-assessment tax return.
You must contact HMRC if your income from property rental is less than £2,500 a year. But you must report it on a Self Assessment tax return if it’s:
- £2,500 to £9,999 after allowable expenses
- £10,000 or more before allowable expenses
As a professional accountant, we do advise to register and declare income through a personal tax return.