Letting agents and tenants pay any withholding tax to HMRC quarterly. This means at the end of June, September, December and March.


To work out how much tax to pay:

  • Add up any rent paid, or any rent the landlord had requested be paid to someone else
  • Take away any expenses paid for the landlord, such as repairs
  • Multiply the figure that remains by the basic rate of tax - 20% for the 2015-16 and 2016-17 tax years.


Example:


Amanda pays her landlord £1,250 a month rent between April and June 2016. During that time she also pays £350 for insurance and £150 in plumbing repairs for her landlord.


  • Her rent was £1,250x 3 months = £3,750
  • Deductible expenses were £500
  • The taxable amount is £3,750 - £500 = £3,250
  • The tax due is £3,250 x 20% = £650