Rental income is considered as part of your total income, and is subject to income tax at your marginal tax rate.

If you have rental income, you will need to report it on your self-assessment tax return each year. You can deduct certain expenses from your rental income to reduce your taxable profit, such as mortgage interest, repairs and maintenance, and letting agent fees. However, you cannot deduct the cost of improvements or capital expenditure, such as a new kitchen or bathroom.

There are a few exceptions to this rule, such as if your rental income is below the Rent a Room Scheme threshold, or if you rent out your property at a loss. The Rent a Room Scheme allows you to earn up to £7,500 per year tax-free if you rent out a room in your home, and the loss relief rules allow you to offset any losses against your other income or carry them forward to future years.

It's important to keep accurate records and receipts to support your rental income and expenses, as HM Revenue and Customs (HMRC) may ask to see evidence of your income and deductions. If you're unsure about your tax obligations or need help with your tax return, you may want to consider consulting a tax professional or accountant.