Accountant for buy-to-let landlords in Woking and Surrey
If you own property personally, you cannot deduct mortgage interest from your rental profit. You get a tax reduction instead, and it is worth considerably less.
The practical effect is that landlords with large mortgages and modest yields are frequently paying tax on a loss. That is not an error in your return — it is how the rules now work.
How mortgage interest actually works now
Finance costs are no longer an expense. Instead you get a basic rate tax reducer worth 20% of the lowest of three figures: your finance costs for the year, your property profits, or your adjusted total income. Anything unused carries forward indefinitely.
Because your taxable rental profit is now calculated before interest, it can push you into the higher rate band on money you never actually received. This is the single biggest reason landlords start asking about companies — and companies still deduct interest in the normal way.
Should you hold property in a company?
It sounds decisive and often is not. It is a calculation, not a principle.
A company deducts interest normally and pays corporation tax at 19% to 25% rather than income tax at up to 45%. Against that, moving property you already own into a company is a sale — capital gains tax at 18% or 24%, and stamp duty at the higher rates, both payable now for a benefit that accrues later.
The answer turns on how long you intend to hold, whether you are reinvesting or drawing the income, how many properties there are, and what your other income looks like. It is worth twenty minutes before it is worth a restructure.
Selling: the 60-day rule catches people out
A UK residential property sale that produces a gain must be reported and paid for long before your tax return is due.
| Item | Position |
|---|---|
| Report and pay | Within 60 days of completion, through a separate HMRC property account |
| Rate within the basic rate band | 18% |
| Rate above it | 24% |
| Annual exempt amount | £3,000 |
This does not wait for your self assessment return. Missing it is a penalty on a transaction you have already completed.
Furnished holiday lets — the regime is gone
The FHL rules were abolished from 6 April 2025. Holiday lets now sit inside your ordinary property business, which means the interest restriction applies to them, capital allowances are no longer available on new spending, and the capital gains reliefs that made FHLs attractive — Business Asset Disposal Relief, rollover, holdover — have gone with them.
FHL income also no longer counts as relevant earnings for pension contribution purposes, which quietly reduces how much some landlords can contribute.
What is coming, and when
Quarterly digital reporting reaches landlords in three waves. The 2028 one is the largest for property.
| Gross rent, plus any self-employment turnover | Mandatory from |
|---|---|
| Over £50,000 | Already live — 6 April 2026 |
| Over £30,000 | 6 April 2027 |
| Over £20,000 | 6 April 2028 |
It is gross rent, not profit, and if you own jointly it is your share that counts. Joint ownership also adds a year-end step: you can report income only in the quarterly updates and add the expenses afterwards, but that means resending the fourth update before the return.
One or two properties, and not sure you need an accountant? You may well not — yet. We would rather tell you that than sell you something you do not need. What usually changes it is a third property, a move into the higher rate band, or the point where quarterly reporting starts to apply to your rents. We will tell you which of those is closest.
Schedule a 20 min Free Review with me.
I offer a review, not a sales call — which may or may not lead anywhere. Most people come away with two or three things worth far more than twenty minutes.
What we cover
- 01What the interest restriction is actually costing you
- 02Whether incorporating stacks up on your numbers
- 03When quarterly reporting starts for your rents