Ask an accountant: landlords

The questions landlords actually ask, answered the way they would be answered on a call: the short answer first, then why, then the free tool if there is one. Rates are those applying in 2026/27, and regulatory items are England unless stated.

34 questions, answered plainly

Yes, once it is over £1,000 a year. Below that the property allowance covers it and there is nothing to report. Register by 5 October following the end of the tax year in which you started.

Am I Trading Checker

No. Property income is not earnings, so there is no Class 2 or Class 4 however large the portfolio, unless what you are doing amounts to a trade. That gap is the stated reason for the new property rates from April 2027.

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31 January after the end of the tax year, with payments on account on 31 January and 31 July once the liability passes £1,000. The first January carries a full year plus half again.

Payments on Account Calculator

As a share of the rent rather than of profit, because rent is what arrives. On £24,000 of rent with £4,000 of costs and £15,000 of interest, a higher rate landlord owes £3,946, which is about 16 per cent of the rent.

Tax Reserve Tracker

Not the capital, and not the interest either. Capital repayment was never a cost. Interest stopped being deductible on 6 April 2020 and now gives a basic rate reduction against the tax instead.

Sole Trader or Limited Calculator

Letting agent fees, landlord insurance, repairs, ground rent and service charge, safety certificates, accountancy, and the business share of travel and phone. Replacing domestic items counts, furnishing the property first time does not.

Expenses and Home Office Log

A comparable kitchen in the same place is a repair, deductible now. A bigger kitchen, or one where there was none, is an improvement that waits until you sell.

Equipment and Software Register

Rent is normally taxed as it arises, so unpaid rent still counts. Once a debt is genuinely irrecoverable you can deduct it as a bad debt, but not while you are still chasing it.

Invoice and Payment Tracker

Because you are taxed on rent less running costs, with the interest ignored, and then given a reduction worth only 20 per cent of it. At £24,000 of rent, £4,000 of costs and £17,000 of interest, the real profit is £3,000 and the tax is £3,546.

Sole Trader or Limited Calculator

Twenty per cent of the lowest of three amounts: your finance costs, your property profits, and your adjusted total income. It is not simply 20 per cent of the interest, and anything unused carries forward.

Sole Trader or Limited Calculator

Not directly. At basic rate the reduction is worth what the deduction was. But because the gross rent counts toward your bands before the interest comes off, it can push a basic rate landlord into higher rate.

Sole Trader or Limited Calculator

It carries forward and joins the next year's finance costs. Nothing is lost, but it may be deferred for years, and nobody tracks the running balance for you.

Sole Trader or Limited Calculator

Almost all of it. Before 2017 a rise cut your taxable profit by the same amount, so a higher rate landlord felt about 60 per cent. Now the interest is not deducted, so you feel nearly the whole rise.

Working Capital Calculator

Five points on every band, including the nil rate band. A £250,000 flat costs £2,500 as a home and £15,000 as a rental. It rose from three points to five on 1 April 2025.

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It does not apply below £40,000, and it can be reclaimed where you were replacing your only or main home and the old one sells within 36 months. Otherwise it is simply part of the price.

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A company deducts its interest in full, which is the whole argument. Buying new inside one costs nothing extra to set up. Moving an existing property in costs stamp duty and capital gains before you save anything.

Sole Trader or Limited Calculator

Ask for the net yield on everything you put in, including stamp duty and legal fees, and after voids. Gross yield on the purchase price alone flatters every listing.

Client Profitability Tracker

Sixty days from completion, for both the return and the payment. It is a separate account from Self Assessment and it takes time to set up, so start before you complete.

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Eighteen per cent on any part of the gain that fits in your unused basic rate band, and 24 per cent above it. For most landlords with a salary that means 24 on the whole gain.

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The price you paid, the buying costs, capital improvements, and the selling costs. Not repairs, which were deducted from rent at the time, and not mortgage interest.

Equipment and Software Register

It can. Transfers between spouses are at no gain no loss, so a share moved before the sale can use a second annual exemption and a second basic rate band. It has to be genuine and it has to be before exchange.

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Yes. Property income counts toward qualifying income and is measured gross, before any expense. Over £50,000 you are in from 6 April 2026, over £30,000 from 2027, over £20,000 from 2028.

Making Tax Digital for Income Tax

Probably. The test reads gross rent, and the finance cost restriction makes profit look small while the rent stays large. A landlord taking £60,000 with £45,000 of interest is in from April 2026.

MTD Quarterly Update Workbook

Each owner counts their own share of the rent. A couple owning a £60,000 portfolio equally have £30,000 each, which can put both of them out of a phase a sole owner would be in.

MTD Readiness Checklist

No. The payment dates are unchanged at 31 January and 31 July. A quarterly update is a running total and carries no payment.

Making Tax Digital for Income Tax

On the interest, yes. On the demo figures a company pays £950 of corporation tax where the individual pays £3,946, so it saves £2,996 a year. Then subtract what it costs to get there.

Sole Trader or Limited Calculator

Stamp duty at the surcharge rate on the full value, and capital gains tax on the transfer. On a £300,000 property with a £60,000 gain that is about £33,364, or roughly eleven years of the saving.

Sole Trader or Limited Calculator

Not without a second layer of tax. Corporation tax first, then dividend tax on anything you draw. A company suits a landlord building a portfolio, not one living on the rent.

Dividend Tax Calculator

Usually. Fewer lenders, higher rates and larger arrangement fees, and a personal guarantee is normally required, so the limited liability is thinner than it sounds.

Corporation Tax Calculator

Thirty days from receiving it, with the prescribed information served in the same window. Miss either and you cannot serve a valid section 21 until it is put right.

Inspection Proof Records Checklist

Five weeks of rent where the annual rent is under £50,000, and six weeks where it is £50,000 or more. Anything above that is a prohibited payment and has to be returned.

Inspection Proof Records Checklist

The EPC, the gas safety record, the current How to Rent guide and the electrical report. Keep proof of all four: without it a section 21 can fail years later.

Inspection Proof Records Checklist

For a house in multiple occupation, usually yes. For an ordinary let it depends on whether the council runs selective licensing in that area, and it can vary street by street.

Inspection Proof Records Checklist

Property income gets its own rates: 22 per cent, 42 per cent, 47 per cent. Two points above the main rates at every band, because property income carries no National Insurance.

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