Accountants for Landlords

We are Chartered Certified Accountants and Chartered Tax Advisers acting for landlords across the UK, from a single buy to let to large portfolios. Landlord taxation has changed more in the last five years than in the previous twenty: mortgage interest relief is restricted, Making Tax Digital quarterly reporting is now live, property income tax rates rise from April 2027, and the furnished holiday lettings regime has gone. This page sets out what those rules mean for you and how we help.

What tax do landlords pay on rental income?

If you own property personally, your rental profit is taxed with your other income at 20%, 40% or 45%. Since the Section 24 rules were fully phased in, mortgage interest is no longer deductible from rental profit for individuals. Instead you get a basic rate credit worth 20% of the interest, which means higher rate taxpayers pay materially more than they would have done under the old rules.

It is about to get more expensive. The November 2025 Budget announced that from April 2027, property income will be taxed at its own rates, two percentage points above the ordinary rates: 22% at basic rate, 42% at higher rate and 47% at additional rate. If you have been putting off a review of how your portfolio is structured, the window before April 2027 is the time to do it.

How much difference does Section 24 actually make?

Example. Rima is a higher rate taxpayer with rent of £18,000 a year, £2,000 of running costs and £8,000 of mortgage interest. Her taxable rental profit is £16,000, because the interest is not deductible. Tax at 40% is £6,400, less a 20% credit on the interest of £1,600, leaving £4,800 to pay. Under the old rules she would have paid 40% on £8,000, which is £3,200. Section 24 costs her £1,600 every year, and from April 2027 the same numbers produce £4,960: 42% of £16,000 is £6,720, less a finance cost credit that rises to 22%, which is £1,760. Planning around this, from ownership structure to how borrowing is arranged, is exactly the work we do.

Making Tax Digital: landlords are first in line

Making Tax Digital for Income Tax went live in April 2026. If your gross property and self employment income was over £50,000 in 2024/25, you must now keep digital records and file quarterly updates through compatible software, with quarterly deadlines on 7 August, 7 November, 7 February and 7 May. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028, which will bring in most landlords with more than one property. Note that the thresholds work on gross rents before expenses, not profit.

We set clients up on compatible software, handle the quarterly submissions and the year end declaration, and use the quarterly rhythm the way it should be used: as four opportunities a year to plan, rather than four more deadlines to fear. You can read more on our Making Tax Digital page.

Should I put my properties in a limited company?

Sometimes, and sometimes not. Inside a company, mortgage interest remains fully deductible and profits are taxed at corporation tax rates of 19% to 25%, with an effective 26.5% on profits between £50,000 and £250,000, which still looks attractive next to 40% or 42%. But moving existing properties in can trigger capital gains tax and stamp duty land tax on the transfer, company borrowing is often more expensive, and money left in the company still has to be extracted before you can spend it. A company buying a residential property pays the 5% higher rates surcharge on top of the standard rates, and where the dwelling costs more than £500,000 a flat 17% rate can apply instead, unless a relief such as property rental business relief applies. The right answer depends on your gains to date, your borrowing, whether you reinvest or spend the profits, and your inheritance plans. We model both routes with real numbers before you commit to either, including whether incorporation relief is available on your facts. For transfers on or after 6 April 2026 the relief has to be claimed in your Self Assessment return; it no longer applies automatically.

There is one more cost people forget. A company holding a residential property worth more than £500,000 falls inside the Annual Tax on Enveloped Dwellings. Letting relief usually reduces the charge to nil, but the return still has to be filed every year by 30 April, in advance, and the penalties for missing it run to £1,600 a year whether or not any tax was due. We build that into the model and file the returns.

Selling a property: the 60 day rule

When you sell a UK residential property at a gain, the capital gains tax has to be reported and paid within 60 days of completion, at 18% or 24% depending on your income, with an annual exempt amount of just £3,000. Private residence relief, lettings history and improvement costs all change the number, and this is one of the most common places we see overpayment. Our capital gains tax reporting service handles the calculation, the reliefs and the return.

Furnished holiday lets: the regime has gone, one relief has not

The furnished holiday lettings regime was abolished from April 2025, taking with it the pension, capital allowance and capital gains advantages. One transitional door is still open: where the holiday letting business genuinely ceased before 6 April 2025, Business Asset Disposal Relief at 18% rather than 24% can still be available on a sale within three years of cessation, so until early April 2028. We covered a real example in our hospitality case studies, where the difference was £37,200 on one disposal.

HMOs and supported living: different rules, real capital allowances

A house in multiple occupation is taxed as residential letting income like any other buy to let, but it behaves differently in practice: licensing fees, higher gross yields, more wear, and one genuinely valuable quirk. Capital allowances are normally blocked on plant inside a dwelling, which is why ordinary landlords cannot claim them on a kitchen or a boiler. In an HMO, HMRC’s published view is that the dwelling is the let bedroom together with the shared kitchen and lounge, while the genuine common parts, the entrance hall, stairs, landings and corridors, are not part of any dwelling. Plant in those areas can qualify: fire alarm and emergency lighting systems, door entry, hard wired smoke detection and communal heating.

The numbers are worth having. On a larger HMO conversion the communal fire safety, lighting and door entry systems alone often run to £15,000 or more, and £15,000 of qualifying plant is worth £6,000 to a higher rate taxpayer (£6,300 at the 42% property income rate from April 2027). Most of these claims are simply never made, because nobody separates the communal spend from the rest of the build.

Supported living sits a step further along. Properties are typically let on longer leases to care providers or registered housing providers, which changes the income profile, and the accommodation itself can sit on the borderline between an ordinary dwelling and something more institutional. That borderline decides how far capital allowances reach, and it turns on the facts: the layout, the level of care provided, and what the lease actually says. We review the property, the lease and the spend before anything is claimed, so the position holds up if HMRC asks.

What we do for landlords

• Self assessment and MTD quarterly filing, with digital record keeping set up for you.
• Section 24 and April 2027 planning, reviewing how ownership and borrowing are structured before the new property rates arrive.
• Incorporation reviews with full before and after numbers, including CGT, SDLT and financing costs.
• 60 day capital gains reporting on sales, with every relief claimed.
• Portfolio and inheritance planning, including ownership between spouses and family investment structures.
• HMRC enquiries and disclosures, including the Let Property Campaign for undeclared rental income, handled by advisers who have worked inside HMRC.
• HMO and supported living advice, including licensing, communal area capital allowances and structuring lets to care providers.

Frequently asked questions from landlords

Do I need to complete a tax return if I rent out one property?

Usually yes. If your rental income after expenses is £2,500 or more, or your gross rents are £10,000 or more, HMRC requires a self assessment return. Between £1,000 of gross rents and £2,500 of profit you must still tell HMRC, which will usually collect the tax through your tax code instead of asking for a return. Below £1,000 of gross rental income the property allowance normally covers it entirely. If you are unsure, we will check your position free of charge.

When does Making Tax Digital apply to me?

From April 2026 if your gross property and self employment income was over £50,000 in 2024/25. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. It works on gross rents before expenses, and once you are in, you file quarterly updates plus a year end declaration.

Can I still deduct my mortgage interest?

Not as an individual landlord letting residential property. You receive a basic rate tax credit worth 20% of the interest instead, which costs higher rate taxpayers real money. A limited company landlord can still deduct interest in full, which is one reason incorporation is worth modelling properly.

How long do I have to report a property sale to HMRC?

Sixty days from completion, using a UK property return, with the capital gains tax paid in the same window. Miss it and penalties and interest follow, even if your final position shows no extra tax.

Is it worth putting my buy to lets into a limited company?

It depends on your gains, borrowing, income needs and long term plans. The company route deducts interest in full and pays lower rates on retained profit, but the transfer itself can cost CGT and SDLT. We run the numbers both ways before you decide, and we will tell you plainly if staying personal is the better answer.

Can I claim capital allowances on an HMO?

Not on the let rooms or the shared kitchen and lounge, because plant in a dwelling is excluded. But plant in the genuine common parts of an HMO, such as hallway and stairway fire systems, emergency lighting and door entry, can qualify. On supported living property the position can go further, depending on how institutional the accommodation is. It is fact specific, so take advice before claiming.

Speak to a Chartered Tax Adviser about your portfolio

Whether it is your first buy to let or a forty property portfolio, the rules above interact, and the cost of getting them wrong compounds every year. Book a free appointment and a Chartered Tax Adviser will review your position, from Making Tax Digital readiness to the April 2027 rate rise, and tell you exactly what is worth doing and what is not.

Related pages: Personal tax returns · Capital gains tax reporting · Property tax case studies.