Specialist support with rental income tax returns, Capital Gains Tax and Making Tax Digital, for landlords with a single buy-to-let or a growing property portfolio, UK-wide.
Whether you’re letting a single property or managing a portfolio across the country, keeping on top of rental income tax doesn’t have to be complicated. We work with individual landlords, joint owners, limited companies and commercial property investors, providing clear, jargon-free advice on everything from your annual tax return to planning ahead for Making Tax Digital.
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Accurate, on-time property tax returns covering your rental income, allowable expenses and any reliefs you’re entitled to.
Clear advice on the tax due when you sell a rental property, including reliefs, allowances and reporting deadlines.
UK residents must report a residential property disposal and pay any Capital Gains Tax due within 60 days of completion. We calculate the gain and handle the HMRC report and payment for you, so you meet the deadline without the stress.
Annual accounts and corporation tax returns for landlords who hold property through a limited company.
If you have undeclared rental income from current or previous years, we help you notify HMRC under the Let Property Campaign and prepare an accurate disclosure and payment within the 90-day deadline, so your position is put right on the best available terms.
Getting you set up with compliant software ahead of your MTD start date, plus support with quarterly submissions.
Guidance on whether holding property personally or through a company suits you, and support if you decide to incorporate.
The tax rules around residential property have changed substantially in recent years. Here is what matters most for buy-to-let landlords and property investors right now.
If you own rental property personally, you can no longer deduct mortgage interest and other finance costs as an expense against your rental income. Instead, you receive a basic-rate (20%) tax reduction, applied after your tax liability has been calculated, based on the lowest of your finance costs, your property profits, or your income above the personal allowance. This restriction has applied in full since the 2020/21 tax year, and it can push higher and additional-rate taxpayers into paying more tax than the profit figure alone would suggest, particularly on heavily mortgaged properties. Landlords who hold property through a limited company are not affected by this restriction and can deduct mortgage interest in full as a normal business expense before corporation tax is calculated, which is one of the main reasons some landlords look at incorporating.
The Furnished Holiday Lettings (FHL) regime, which gave holiday-let owners a range of tax advantages over standard residential landlords, was abolished from 6 April 2025 for Income Tax and Capital Gains Tax, and from 1 April 2025 for Corporation Tax. If you previously ran a qualifying holiday let, your property is now taxed in the same way as any other residential letting business: mortgage interest is restricted to the basic-rate tax reduction described above, capital allowances on furnishings have been replaced by the standard replacement of domestic items relief, and reliefs such as Business Asset Disposal Relief and rollover relief on a sale generally no longer apply. Former FHL profits also no longer count as relevant UK earnings for pension contribution purposes. If you still let a former holiday property, it is worth reviewing your structure now that these advantages have gone.
Whether to hold property personally or through a limited company depends on your tax rate, how many properties you have, whether you plan to reinvest profits or draw them as income, and your long-term exit plans. A company pays corporation tax on its profits rather than Income Tax, and can deduct mortgage interest in full, but you will pay further tax, usually as dividends, when you extract money from the company, and moving existing properties into a company can trigger both Stamp Duty Land Tax and Capital Gains Tax on the transfer, even though no cash changes hands. There is no single right answer here, it depends on your numbers. We model both scenarios so you can see the actual figures before deciding.
If you own a rental property jointly with your spouse or civil partner, HMRC’s default position is to tax the rental profit as an even 50/50 split between you, regardless of your actual ownership shares. If you genuinely own the property in unequal shares, for example 90/10, and want to be taxed on that basis instead, you need to file a Form 17 declaration with HMRC, supported by evidence of your unequal beneficial ownership such as a declaration of trust. This can be a useful, legitimate way to move rental income towards the lower or non-taxpaying spouse, but the ownership split has to be genuine, not just a paper exercise, and needs the right documentation in place before you file.
Buying a residential property in addition to one you already own, including your first buy-to-let purchase if you still own your home, generally attracts a Stamp Duty Land Tax surcharge on top of the standard rates. The surcharge currently stands at 5%, having risen from 3% at the October 2024 Budget. This applies in England and Northern Ireland; Scotland and Wales have their own equivalent land transaction taxes with separate rates. We can point you to specialist advice on the SDLT position for a specific purchase as part of your wider tax planning.
HMRC expects landlords to keep accurate records of rent received and expenses for at least five years after the 31 January submission deadline for the relevant tax year. As Making Tax Digital for Income Tax is phased in, from April 2026 for qualifying income over £50,000, dropping to £30,000 from April 2027 and £20,000 from April 2028, digital record-keeping stops being optional and becomes a requirement, with quarterly updates sent to HMRC instead of a single annual return. Getting your records into the right software before your start date makes the transition far less disruptive, and we help clients make that move well ahead of time rather than in a rush.
Clear, upfront pricing. Get in touch for a tailored quote based on your circumstances.
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All fees are guide prices, excluding VAT unless stated. Your exact fee will depend on your specific circumstances. Fees are based on rental income plus one other additional income source.
Straightforward answers to the questions we’re asked most.
Rental income includes the rent you charge, plus any payments tenants make towards services you provide, such as utility bills, cleaning of communal areas, or arranging repairs. Non-refundable deposits, or any part of a deposit you keep to cover damage, also count as income. If that money is later spent on repairs, it can usually be claimed back as an allowable expense.
You can deduct costs incurred wholly and exclusively for letting the property. These include general repairs and maintenance, landlord insurance, letting agent and accountancy fees, council tax and utility bills you pay, advertising for tenants, and travel costs directly related to the property. Improvements and new furnishings count as capital expenditure rather than a day-to-day expense, though they may reduce a future Capital Gains Tax bill when you sell.
If your rental profit is £2,500 or more after expenses, or your rental income is £10,000 or more before expenses, HMRC will normally expect you to file a Self Assessment tax return. If you’re a new landlord, you need to register for Self Assessment by 5 October following the end of the tax year in which you first received rental income.
Rental profits are added to your other income and taxed at your marginal rate: 0%, 20%, 40% or 45%, depending on which band you fall into. If you already pay tax through PAYE or self-employment, rental profit sitting on top could push you into a higher tax bracket, so it’s worth planning ahead.
Selling a rental property usually triggers Capital Gains Tax on the increase in value since you bought it. Residential property gains are currently taxed at 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers, after deducting your annual exempt amount and any allowable costs.
Making Tax Digital (MTD) for Income Tax is HMRC’s new way of reporting self-employment and property income. If your qualifying income was above £50,000 on your 2024/25 tax return, you’re required to use MTD from April 2026. This means keeping digital records and sending quarterly updates instead of one annual return. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028, so most landlords will eventually be brought into MTD.
HMRC requires landlords to keep accurate, complete records of rent received and expenses for at least 5 years after the 31 January submission deadline. This includes rent books, invoices, receipts, bank statements, and mileage logs for any travel you claim.
Not directly. Since the 2020/21 tax year, individual landlords receive a basic-rate (20%) tax reduction on finance costs instead of deducting them from rental income before tax. This is calculated on the lowest of your finance costs, your property profit, or your income above the personal allowance, and it cannot create a tax refund on its own. Property held through a limited company is not affected by this restriction and can deduct mortgage interest in full as a normal business expense.
The Furnished Holiday Lettings regime was abolished from 6 April 2025 for Income Tax and Capital Gains Tax, and from 1 April 2025 for Corporation Tax. Former holiday lets are now taxed in the same way as any other residential letting business, losing the previous advantages around full mortgage interest deduction, capital allowances on furnishings, and Capital Gains Tax reliefs such as Business Asset Disposal Relief.
By default, HMRC taxes jointly owned property income as an even 50/50 split between spouses and civil partners, regardless of the actual ownership shares. If your genuine ownership shares are different and you want to be taxed on that basis instead, you need to file a Form 17 declaration with HMRC, supported by evidence of your unequal beneficial ownership such as a declaration of trust.
No. While most clients prefer cloud software such as Xero, QuickBooks, Sage or FreeAgent, we understand not everyone wants to work in the cloud. If you'd rather not use cloud software for your bookkeeping, we also support off-cloud software such as VT Transaction+.
Tell us about your circumstances and we’ll come back to you with clear next steps, typically the same working day. Our support is available in person, by phone, email or a virtual video meeting, whichever suits you best.