Whether you own a single buy-to-let flat or a portfolio of residential properties, UK landlord tax has changed significantly since 2020. The phased removal of mortgage interest deductibility under
Section 24, a tighter CGT reporting window, the arrival of Making Tax Digital for Income Tax (MTD ITSA), and a higher SDLT surcharge on additional dwellings mean that managing property income now requires a level of care that a standard self-assessment return rarely captures on its own.
AccTek works with buy-to-let portfolio owners, single-property landlords, and furnished holiday let operators across the UK. If you are wondering whether a specialist landlord accountant is worth it — or what one actually does — this guide covers the full picture for the 2026–27 tax year.
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A landlord accountant is not simply someone who files your self-assessment each January. Done properly, landlord accountancy covers the full cycle of your property income: recording rental receipts and categorising expenses throughout the year, managing the compliance obligations that now sit alongside the basic filing requirement, and keeping you ready for a tax system that has grown considerably more complex in recent years.
Landlords with UK property income file an SA100 (the main self-assessment return) together with the SA105 UK Property supplementary pages. The SA105 captures rental income, allowable expenses, and — where applicable — the restricted mortgage finance costs under Section 24. Errors on this supplementary page are among the most common causes of overpaid tax and HMRC compliance queries.
Since April 2020, residential landlords can no longer deduct mortgage interest as a business expense directly from rental income. Instead, you receive a 20% basic-rate tax credit on your finance costs. For basic-rate taxpayers the practical effect is broadly similar to the pre-2020 position; for higher-rate and additional-rate taxpayers the difference is material — relief that previously operated at 40% or 45% now operates at 20%. In some cases, gross rental income now falls into a higher tax band even when net income has not grown, because costs are no
longer deducted before income is assessed.
This is a factual description of the legislation. How it affects your position depends on your income profile, portfolio structure, and wider tax picture — factors that require a qualified accountant to model accurately.
If your gross annual rental income exceeds the £1,000 property income allowance, you are generally required to register for self-assessment and report that income to HMRC. You must notify HMRC by 5 October following the end of the tax year in which you first received rental income. The online filing and payment deadline for 2025–26 is 31 January 2027. Failure to notify HMRC of a new untaxed income source is itself a compliance risk that can attract penalties.
Making Tax Digital for Income Tax (MTD ITSA) is now live for the first wave of landlords. From April 2026, landlords (and self-employed individuals) whose total gross income from property and self-employment combined exceeds £50,000 must:
From April 2027, the threshold falls to £30,000. Current requirements and timeline are confirmed at GOV.UK: Making Tax Digital for Income Tax. If you are above the £50,000 threshold and have not yet enrolled, you are already within scope for the 2026–27 tax year.
If you sell a residential property in the UK that is not your primary residence, you must report any chargeable gain and pay Capital Gains Tax due within 60 days of the completion date. This is a
separate obligation from your annual self-assessment return and applies regardless of whether you would normally file a return. Full rules at GOV.UK: Report and pay your Capital Gains Tax.
The restriction applies to residential property held personally (not within a limited company). In place since April 2020, it replaced full mortgage interest deductibility with a 20% basic-rate tax credit on finance costs. The technical rules are at GOV.UK: Restricting finance cost relief for individual landlords.
Illustrative example — for information only, not tax advice:
Landlord A (basic-rate taxpayer) receives £18,000 annual rental income and pays £8,000 in mortgage interest. Under current rules, the £8,000 is not deducted from rental income before tax is calculated. Landlord A pays Income Tax on the £18,000 (less other allowable expenses) and then receives a £1,600 tax credit (20% × £8,000). For a basic-rate taxpayer, the effective position is broadly similar to the pre-2020 system.
Landlord B (higher-rate taxpayer at 40%) has the same figures. Pre-2020, the £8,000 deduction reduced tax by £3,200 (40% × £8,000). Under current rules, the credit remains £1,600 — a difference
of £1,600 per year on this example alone.
These figures are illustrative only. They do not constitute tax advice. Your actual position depends on your full income profile, personal allowance, and any other reliefs applicable to you.
When you dispose of a buy-to-let property, any gain above the annual CGT exempt amount (£3,000 for 2026–27, per GOV.UK: CGT rates and allowances) is subject to Capital Gains Tax. Confirmed rates for residential property gains in 2026–27 are:
Principal private residence relief applies to your main home and reduces or eliminates CGT on its sale — see GOV.UK: Capital Gains Tax on property for full conditions. The 60-day
reporting obligation applies from the completion date of any residential property disposal that does not qualify for full principal private residence relief.
Since 31 October 2024, the Stamp Duty Land Tax surcharge on purchases of additional residential dwellings — including buy-to-let acquisitions — is 5% on top of the standard SDLT rates (England and Northern Ireland). Full rates, thresholds, and reliefs at GOV.UK: SDLT — residential property rates.
| From | Threshold | Requirement |
|---|---|---|
| April 2026 | Gross property + SE income > £50,000 | Quarterly digital updates + end-of-period statement + final declaration |
| April 2027 | Gross property + SE income > £30,000 | As above |
| TBC | Further thresholds | Subject to future HMRC announcement |
If your income exceeds the £50,000 threshold and you have not yet enrolled, contact AccTek to ensure your records and software are compliant now.
Correctly identifying and recording allowable expenses is one of the highest-value activities in landlord bookkeeping. HMRC’s detailed
guidance is at GOV.UK: Work out your rental income when you let property.
Repairs and maintenance — costs of keeping the property in its existing condition: like-for-like repairs, redecorating, fixing a broken boiler. The key distinction is between repair
(restoring what was there) and improvement (adding value beyond the original). Capital improvements are not allowable as revenue expenses but may reduce a CGT gain on disposal.
Letting agent and property management fees — fully deductible as a cost of managing the rental business, including tenant-find fees and management percentage charges.
Professional fees — accountancy fees incurred in connection with rental income, and legal costs for income purposes (for example, renewing a short lease on commercial terms). Legal costs
incurred on purchasing or selling a property are capital costs, relevant to CGT rather than rental income tax.
Buildings and contents insurance — deductible where the landlord pays the premium, including for furnished lets.
Utilities and council tax — deductible only where the landlord bears the cost rather than the tenant: for example, council tax during void periods, or utilities included in rent in an HMO
arrangement.
Ground rent and service charges — for leasehold properties, where incurred in connection with the letting.
What you cannot claim:
“Should I put my buy-to-let into a limited company?” is among the most common questions a landlord accountant receives. The honest answer: it depends on your specific numbers, and it is genuinely not a decision with a universal right answer.
In a limited company, mortgage interest remains fully deductible as a business expense — Section 24 does not apply to corporate landlords. Rental profit is subject to Corporation Tax rather
than Income Tax, and profit can be retained within the company or extracted as salary, dividends, or a combination, depending on your personal income needs.
In personal name, rental income is subject to Income Tax at your marginal rate, with the Section 24 restriction applying to finance costs. Transferring an existing personally-held property into a
company can trigger SDLT on the transfer value, CGT on any accrued gain, and early redemption costs on existing personal mortgages — so the decision carries real transaction costs that can make incorporation expensive in the short term even if the long-term tax position looks more favourable.
The right structure depends on portfolio size, personal income level, mortgage availability on company buy-to-let products, long-term investment objectives, and whether properties are being acquired fresh or transferred from personal ownership. What we can do is model the numbers for your specific situation before you make any structural change — or before you complete a new purchase.
→ See also: Sole Trader vs Limited Company — Tax Comparison (general principles of personal vs corporate tax structures)
AccTek is a qualified chartered accountancy practice, ICPA member, and AML-supervised by HMRC. We work with buy-to-let landlords — from single-property owners to portfolio holders — across the UK, fully remote, using cloud accounting software that integrates with your bank feeds and property management tools.
What we cover:
Book a free landlord consultation — no obligation, no jargon. acctek.co.uk/contact
You are not legally required to use an accountant to file a self-assessment return. However, landlord tax involves multiple overlapping obligations — SA105 property pages, Section 24 finance cost calculations, 60-day CGT reporting, and (from April 2026 for higher-income landlords) MTD ITSA quarterly submissions. Errors in any of these can result in overpaid tax or HMRC penalties. Many landlords find that specialist accountancy support more than covers its cost through correctly claimed expenses and avoided compliance risks.
Fees vary by provider and the scope of work required. AccTek offers fixed-fee packages tailored to portfolio size and filing complexity. Book a free consultation for a personalised quote.
Section 24 of the Finance (No. 2) Act 2015 restricts the tax relief residential landlords can claim on mortgage finance costs. Since April 2020, landlords holding property personally can no longer deduct mortgage interest from rental income. Instead, they receive a 20% basic-rate tax credit on finance costs. The impact is greatest for higher-rate and additional-rate taxpayers, who previously deducted interest at their marginal rate. Full HMRC guidance: GOV.UK — Restricting finance cost relief for individual landlords.
Not as a direct deduction from rental income — the 20% tax credit replaced full deductibility from April 2020. The credit is calculated on the lower of your finance costs, your property business profits, or your adjusted total income above the personal allowance. A qualified accountant ensures the credit is correctly applied to your return and that you are not overpaying because of a calculation error.
Common allowable expenses include letting agent fees, repair and maintenance costs (not capital improvements), buildings and contents insurance, professional fees related to rental income, and utilities or council tax borne by the landlord during void periods. Capital costs — including improvements that enhance the property beyond its original state — are not deductible against rental income but may reduce a chargeable CGT gain on disposal. HMRC guidance: GOV.UK — Work out your rental income when you let property.
If your gross rental income exceeds the £1,000 property income allowance, you are generally required to register for self-assessment and report that income to HMRC. You must notify HMRC by 5 October following the end of the tax year in which you first received rental income — failure to do so can attract a failure-to-notify penalty. GOV.UK: Register for Self Assessment.
Making Tax Digital for Income Tax (MTD ITSA) is HMRC’s digital record-keeping and reporting programme for Income Tax. From April 2026, landlords whose gross property income (combined with any self-employment income) exceeds £50,000 must keep digital records and submit quarterly updates to HMRC. The threshold falls to £30,000 from April 2027. If you are within scope and have not yet enrolled, speak to AccTek about getting your software and processes compliant. GOV.UK: Making Tax Digital for Income Tax.
All statutory rates and thresholds cited in this guide are for the 2026–27 tax year and verified against GOV.UK guidance at time of writing. Tax legislation changes regularly — always check GOV.UK for the current position or speak to a qualified accountant. This guide is informational only and does not constitute tax advice. AccTek Ltd — qualified chartered accountancy practice · ICPA member · AML-supervised by HMRC.
Godwin Pinto ACA (ICAI) is the founder of AccTek and a member of ICPA, with 20+ years of experience in accounting and tax for contractors, startups and SMEs. Previously at PwC.
AccTek is a member firm of the Institute of Certified Practising Accountants (ICPA). Our accountants have a wide range of qualifications and accreditations from trusted professional bodies such as the AAT, ICPA, and ACCA.
