Do You Pay Tax on Renting Out Your Driveway or Garage?

Do you pay tax on renting out your driveway?

If your gross income for the tax year is £1,000 or less, you do not have to pay tax on renting out your driveway. If the income is more than £1000, some of it may be taxed.

HMRC treats a driveway as land. Its guidance on online platforms lists a driveway as an example of land you might rent out, alongside rooms and whole properties. HMRC’s Property Income Manual confirms that rent from bare land is taxable as property income. It also confirms that payments from licensees, not just tenants, count as property business receipts.

The same rules apply to a parking space, garage, lock-up or storage space. It makes no difference whether you let it through an app or through an informal arrangement with a neighbour.

How does the £1,000 property allowance work?

The property allowance is a tax-free amount of up to £1,000 each tax year for individuals with income from land or property. It applies to your gross income, meaning the total you receive before taking off any costs or allowances.

• One limit for all your property income. The £1,000 limit applies to your total gross property income from all sources, not to each space or each app.
• Joint owners. If you own the space jointly, each owner can claim a separate £1,000 allowance against their share of the income.
• Keep records. You must keep records even when your income stays under £1,000. Useful records include statements from the company that paid you, bank statements and payment emails.

Renting out a parking space through an app: which figure counts?

HMRC uses your gross income for the tax year. That figure is often higher than the total on your parking app statement, for two reasons.

The statement covers the wrong period. Platform reports show your earnings for the calendar year, broken down into quarters. HMRC needs the figure for the 6 April to 5 April tax year instead. To convert it, take the April to December quarters from one report and the January to March quarter from the next. Then adjust for any bookings made on 1 to 5 April, which fall in the previous tax year.

The statement shows income after fees. The platform report total has fees and commission already deducted. HMRC measures gross income before any expenses are taken off. Add the commission back before you compare your income with £1,000.

As an example (the commission rate is just an example and not the rate for any particular platform), an app account shows that it made £950 in the year after a 15% commission. It makes more than £1,000, so the gross income is about £1,118 (£950 ÷ 0.85).

When do you need to tell HMRC about driveway or garage income?

You need to tell HMRC when your gross property income is more than £1,000 in a tax year. How you report it depends on the amount.

These thresholds come from GOV.UK’s guidance on paying tax when renting out property.

If you usually don’t send in a tax return, you need to sign up for Self Assessment by October 5, the fifth day after the tax year ends. The due date for income made between April 6, 2025, and April 5, 2026, is October 5, 2026. Later, on January 31, 2027, the online report and any tax due must be turned in and paid.

If you already file a return, deduct the allowance from your gross property income on the return itself.

HMRC’s free online income checker gives a personal answer in a few minutes. Get help registering for Self Assessment

Does JustPark tell HMRC what you earn?

Yes. JustPark says it reports host earnings to HMRC, as required by digital platform reporting rules that started on 1 January 2024.

• What the rules require. UK platform operators collect seller details each calendar year and send them to HMRC by the following January.
• What JustPark says. JustPark’s help centre says it must declare the information of hosts who have had more than one booking. It asks hosts to complete identity and tax information checks to keep hosting.
• What a report means for you. A platform report does not automatically mean you owe tax. The platform must also send you a copy of what it reports.

Other parking and storage apps may report under the same rules, so check your platform’s seller notices. Keep your own records consistent with the figures HMRC receives.

Should you use the property allowance or claim expenses?

Use the property allowance when your costs are below £1,000. Claim actual expenses when your costs are higher, or when they exceed your income, because the allowance cannot create a loss.

Once your income passes £1,000, you can deduct the allowance instead of your expenses, up to the amount of your income. You cannot claim both.

GOV.UK’s list of allowable costs includes letting agents’ fees, maintenance and repairs, and advertising. Platform commission is a direct cost of letting the space.

Example: gross income of £1,800 and costs of £250.

• Property allowance: £1,800 minus £1,000 leaves £800 taxable.
• Actual expenses: £1,800 minus £250 leaves £1,550 taxable.

The allowance gives the better result in this case.

When can you not use the property allowance?

You cannot use the property allowance on property income from your own company, a connected partnership or your employer. Some landlord reliefs also rule it out. In these cases, you must tell HMRC even if you earn £1,000 or less.

The allowance is not available for a tax year if you have property income from any of these:

• a company that you, or someone connected to you, owns or controls, such as a director letting a driveway to their own company;
• a partnership where you, or someone connected to you, is a partner;
• your employer, or your spouse’s or civil partner’s employer.

It is also unavailable if you:

• claim the tax reducer for finance costs, such as mortgage interest, on a residential property;
• claim expenses on lodger income instead of using the Rent a Room Scheme.

The mortgage interest rule matters for landlords because HMRC works out the profit from all your lettings as if they were one business. A buy-to-let landlord who claims the finance cost reducer therefore cannot use the allowance on driveway income either. Get tax support for landlords with more than one income source.

Is renting out garage storage taxed the same way?

Usually, yes. Letting garage, loft or spare room space for someone to store belongings is normally property income. The same £1,000 allowance and reporting thresholds apply.

The Rent a Room Scheme does not help here. That scheme exempts up to £7,500 a year from letting furnished accommodation in your home, or £3,750 if you share the income. Storage space is not accommodation.

The position can change if you also collect, pack or move items for customers. HMRC treats services you provide to others as trading activity, which has its own separate £1,000 trading allowance. Take advice if your storage letting includes services like these.

What if you have several spaces or other rental income?

HMRC adds all your UK property income together. Income from several parking spaces, a garage and a rented flat all counts towards the same totals. That affects two rules.

Making Tax Digital for Income Tax. Qualifying income is your total self-employment and property income before expenses. You must use Making Tax Digital from these dates:

• 6 April 2026, if your qualifying income was over £50,000 in the 2024 to 2025 tax year;
• 6 April 2027, if it is over £30,000 in 2025 to 2026;
• 6 April 2028, if it is over £20,000 in 2026 to 2027.

Driveway income can push a landlord or sole trader over one of these thresholds. 

Property income tax rates from April 2027. Finance Act 2026 sets separate property income rates of 22% basic, 42% higher and 47% additional for the 2027 to 2028 tax year. These rates apply in England, Wales and Northern Ireland. Scottish taxpayers are charged at Scottish rates instead. From 6 April 2027, HMRC will tax any taxable driveway income at these new rates.

What if you did not declare driveway income in earlier years?

Tell HMRC now. If you disclose past rental income yourself, any penalty will be lower than if HMRC finds the income first.

After you disclose, HMRC gives you a reference number, and you then have 3 months to work out and pay what you owe. You cannot use the £1,000 allowance for tax years before 2017 to 2018. HMRC handles these disclosures through the Let Property Campaign.

Platform data makes this more pressing. Platforms reported their 2024 seller earnings to HMRC by 31 January 2025, so HMRC may already hold figures for your account.