Expert Accountants for Landlords & Property Investors in London

If your combined rental income and self-employment income was £50,000 or more in the 2024-25 tax year, you must register for Making Tax Digital for Income Tax by 6 April 2026. This is mandatory—not optional.

The threshold progressively reduces: from April 2027 it drops to £30,000, and from April 2028 it reduces further to £20,000. By 2028, nearly 3 million people will be required to use Making Tax Digital.

You need to choose MTD-compatible software, convert all records to digital format, and prepare to submit quarterly income and expense updates to HMRC by 7 August, 7 November, 7 February, and 7 May each year.

No, not in the traditional sense. Since Section 24 came into full effect in April 2020, landlords can no longer deduct mortgage interest from rental income before calculating tax.

Instead, you receive a 20% tax credit on your mortgage interest payments, applied after your tax is calculated. This significantly affects higher-rate taxpayers. For example, if you pay £10,000 in mortgage interest and you're a 40% taxpayer, under the old system you would have saved £4,000 in tax. Now you save only £2,000—a 50% reduction in tax relief.

Basic rate taxpayers (20% tax bracket) are not significantly affected by Section 24, as the 20% tax credit equals what they would have received under the old system. But higher-rate (40%) and additional-rate (45%) taxpayers face substantially increased tax bills.

It depends on your specific circumstances. Limited companies can still deduct 100% of mortgage interest as a business expense and pay corporation tax at 19-25% rather than income tax at up to 45%. This makes incorporation attractive for higher-rate taxpayers with high mortgage debt.

However, transferring existing properties to a company triggers Capital Gains Tax on the full gain to date (18-24%) plus Stamp Duty Land Tax at 5% on the property value over £250,000. These transfer costs can be substantial and may take years to recoup through tax savings.

Incorporation is typically beneficial if you're a higher or additional rate taxpayer, have high mortgage borrowing, plan to reinvest profits rather than extract income, and are building a long-term portfolio.

It's usually not worthwhile if you're a basic rate taxpayer, own properties outright or with low debt, need regular income, plan to sell within 5 years, or want simpler tax affairs.

LOYALS offers transparent, fixed-price landlord accounting services with no hidden fees. Our pricing depends on your portfolio complexity and income level.

Self-Assessment Tax Return: £300 one-off for landlords with rental income under £50,000. Includes complete preparation, submission, expense optimization, and HMRC correspondence handling.

MTD Quarterly Submissions: £600 per year for landlords with £50,000+ rental income who require Making Tax Digital compliance. Includes all four quarterly submissions, software setup, digital record-keeping, and year-end declaration.

Premium Portfolio Management: £150 per month for multi-property landlords needing full bookkeeping, property-by-property analysis, CGT planning, and strategic growth advice.

Allowable expenses include property repairs and maintenance (not improvements), letting agent fees, buildings insurance, ground rent and service charges, utility bills and council tax (if you pay them), mortgage interest (as 20% tax credit), legal and accountancy fees, replacement of domestic items like carpets and white goods, advertising for tenants, and travel costs to manage the property.

You cannot claim mortgage capital repayments (only interest), property improvements like extensions or new kitchens (these add to your CGT cost base), initial furnishing costs, personal use expenses, or depreciation.

A common mistake is claiming improvements as repairs. A repair fixes existing facilities; an improvement enhances the property beyond its original state. New windows are improvements; fixing broken window frames is a repair.

When you sell a UK rental property, you pay Capital Gains Tax at 18% (if you're a basic rate taxpayer) or 24% (if you're a higher rate taxpayer) on the profit after deducting purchase costs, sale costs, and qualifying improvements.

The annual CGT allowance has been drastically reduced to just £3,000 for 2024-25, meaning nearly all property gains are now taxable. You must report the sale and pay CGT within 60 days of completion—miss this deadline and you face penalties.

From April 2027, property CGT rates are scheduled to increase further as part of the Autumn Budget 2025 changes. Proper planning is essential to minimize CGT through timing of sales, utilizing available reliefs, offsetting losses, and strategic structuring of property disposals.

If the property was your main residence at any point, you may qualify for Private Residence Relief on a portion of the gain. Lettings Relief was abolished in April 2020 except for landlords who share occupation with their tenants.

Even with a single property, landlord tax rules are complex. Section 24 mortgage interest restrictions, Making Tax Digital requirements from April 2026 for income over £50,000, Payment on Account obligations, proper expense claiming, and CGT calculations all require expertise.

Many single-property landlords overpay tax by thousands of pounds annually because they don't maximize allowable expenses, claim mortgage interest incorrectly, or miss valuable reliefs. The cost of professional accounting (£300 one-off for basic Self-Assessment) is typically recovered multiple times over through proper tax optimization.

From April 2026, if your rental income plus any self-employment income exceeds £50,000, you'll be legally required to use Making Tax Digital, which involves quarterly submissions using specialized software. Getting set up correctly from the start prevents costly mistakes and HMRC penalties.

Making Tax Digital (MTD) for Income Tax is the government's digitization program requiring landlords to keep digital records and submit quarterly income and expense updates to HMRC using compatible software.

From 6 April 2026, it becomes mandatory for landlords whose combined rental income and self-employment income was £50,000 or more in 2024-25. You'll need to submit four quarterly updates per year (by 7 August, 7 November, 7 February, and 7 May) showing your income and expenses for each quarter, plus a final year-end declaration by 31 January.

These quarterly updates are not additional tax returns—they're simply digital records of your transactions. You still only pay tax once or twice a year as per current arrangements. However, you must use HMRC-approved software to maintain and submit these records. HMRC does not provide software; you must choose from commercial options.

The penalty system uses points: one point per missed deadline. At 4 points, you face a £200 financial penalty. Points remain on your record for 2 years. For 2026-27 only, there's a grace period with no penalty points for late quarterly submissions—but this doesn't apply to your final year-end return.

Yes! LOYALS serves landlords and property investors throughout Greater London including Westminster, Camden, Islington, Hackney, Tower Hamlets, City of London, Southwark, Lambeth, Wandsworth, Kensington and Chelsea, Hammersmith and Fulham, Greenwich, Lewisham, Brent, Ealing, Hounslow, Richmond, Kingston, Merton, Croydon, Bromley, Barnet, Haringey, Enfield, Waltham Forest, Redbridge, Havering, Barking and Dagenham, Newham, Bexley, Sutton, and Hillingdon.

Our King's Cross office at 39-41 North Road (N7 9DP) is easily accessible from anywhere in London via major transport links. We also offer extended support hours Monday-Friday 9am-6pm and Saturday-Sunday 10am-5pm, making us available when you need us.

As chartered accountants, we provide the same premium service to all London landlords regardless of location, from single-property investors in Croydon to multi-property portfolio landlords in Westminster.

HMRC uses a penalty points system for MTD non-compliance. You receive one penalty point for each missed quarterly submission deadline. Once you accumulate 4 points, you'll face a £200 financial penalty. Points remain on your record for 2 years.

For taxpayers joining MTD for Income Tax in April 2026, HMRC has announced a 12-month grace period with no penalty points for late quarterly updates during the 2026-27 tax year. However, this relaxation does NOT apply to the end of year final declaration, which is due by 31 January 2028.

After the grace period ends, late submission penalties will be strictly enforced. Additionally, continuing non-compliance can trigger tax investigations, increased scrutiny of your returns, and potential discovery assessments going back 4 years (or up to 20 years if HMRC suspects deliberate non-disclosure).

The best approach is to get properly set up before April 2026 rather than relying on the grace period. LOYALS provides complete MTD setup and quarterly submission services to ensure you never miss a deadline.