Becoming a Landlord in the UK: The Essential Information

2024-06-04

Being a landlord in the UK inevitably involves dealing with taxation. As an overseas landlord, what tax numbers do you need to be aware of? What are the relevant tax payment processes? Why does the agency deduct 20% of tax directly?

How Can You Easily Become a Landlord in the UK, Whilst Saving Money and Reducing Stress?

We would like to introduce two crucial numbers related to overseas landlords: UTR (Unique Tax Reference) and NRL (Non-Resident Landlord) registration.

The Application Process

Before officially becoming a landlord, you need to apply for two tax-related numbers: UTR (Unique Tax Reference), and Non-Resident Landlord Registration (NRL1).

UTR (Unique Tax Reference):

UTR, or Unique Tax Reference, is a 10-digit sequence used annually for tax reporting.
Once approved, the UK Revenue Service will send this reference number in writing to your provided permanent address.
You'll need to provide this number to your accountant for annual tax reporting.

NRL1 (Non-Resident Landlord Registration):

NRL1, or Non-Resident Landlord Registration, is required for landlords who reside in the UK for less than 183 days each year.
It's crucial because if you don't apply in time, the agency won't receive the approval letter from the UK Revenue Service. In that case, the agency must deduct 20% as withholding tax from your rent, as required by UK tax law.

How to Avoid Agency Withholding 20% Tax?

It's simple! Prepare in advance and apply early.

The application period for the Non-Resident Landlord Registration is approximately 4-6 weeks. Therefore, we recommend finding an agency three months before handing over the property, giving you enough time to apply in advance.

The specific costs vary. Typically, agencies charge a separate fee for this service. However, the lettings department of provides this service for our landlords free of charge.

Details Required for NRL1:

Personal information, including name, permanent address, information about renting out the property in the UK, and details of your agency (NA number).

It's also worth mentioning that only agencies registered with the UK Revenue Service and possessing the necessary qualifications have an NA number, allowing them to prepay taxes on behalf of the Revenue Service. Therefore, you must request the NA number from your agency in advance.

Landlords should also note that if the agency has already deducted your tax, you must request a tax certificate (NRL6 certificate) from the agency by July 5 each year. Providing this information to your accountant to ensure accurate tax reporting.

We hope our article is helpful to you. If you have properties in London and are looking for a reliable and professional agency for rental management, please contact us. We are located in London and offer premier services for buying, selling and lettings management.

E: info@chbl.uk

Office Tel +44 (0) 207 903 6881

Reference: UK Revenue Service: Find UTR Number