Yes, you have to declare all income unless there is a specific exemption. Normally if your costs exceed your income you won't have to pay tax on it, but it has to be calculated first. If you are found to have paid too much tax for whatever reason, you will get it paid back later in the year.
How you pay tax on rental income depends on circumstances. If you are renting a room in your house and you're not taking part in the Rent a Room scheme, you pay tax on whatever is left after your expenses are taken into account. These include heating, repairs and any other services you offer such as meals. If you do join the scheme, you have a tax free allowance of about £4,200 (this may be shared with another person if someone else in your house is also getting rental income).

You can find more information here or contact HMRC through the website if you have more questions.