Accountants for Buy To Let Landlords
Is it still wise to invest in buy-to-let property?
Buy-to-let property in the UK is still widely considered a sound investment, with good potential for capital growth plus the promise of a steady rental income. The market is starting to show signs of recovery following the coronavirus outbreak and rental prices have enjoyed continued growth, providing confidence to investors both existing and new.
It’s fair to say that rental property isn’t quite the golden goose it once was, in light of the recent slew of changes made by the government to landlord tax benefits. In April 2020 mortgage interest relief (MRI) for landlords ended, having been phased out since 2017. There are also more changes afoot to Capital Gains Tax.
Why do landlords need an accountant?
It pays to be well-informed and understand how these changes will impact you as a landlord. This is one area in which the knowledge and expertise of property accountants can be invaluable, in providing advice and seeking out tax efficiencies.
What are my financial responsibilities as a landlord?
As a landlord, you have many financial and administrative responsibilities. Having personal rental income requires you to register for self-assessment and to complete annual tax returns. Similarly, if your property is owned by a limited company, you are required to submit annual accounts and tax returns.
Along with the countless other responsibilities you have as a landlord, the financial landscape can be difficult and onerous to navigate, even for the most experienced landlords. Treetops can help relieve the burden, allowing you to concentrate on the other aspects of being a successful landlord.
Where can Treetops help?
It is possible, with the right financial advice and services, for buy-to-let landlords to achieve a very rewarding return on investment. Whether you are a professional buy-to-let landlord or renting out a second property, Treetops can offer our professional services and expertise to help you get the most out of your hard-earned investment.
- Preparing rental accounts
- Reviewing expenditure to get tax efficiencies
- Preparing tax returns
- Landlord specific reliefs
- Making Tax Digital
Tax on buy-to-let: frequently asked questions
Call us to talk through your tax position as a landlord. We will explain the recent changes and how they apply to your properties. As a starter for ten, here are a few useful questions and answers.
How does stamp duty work on buy-to-let?
The nil-rate threshold for Stamp Duty Land Tax on residential property in England and Northern Ireland is £125,000 from 1 April 2025. Purchases of additional residential property, including most buy-to-let purchases, also attract a surcharge on top of the standard rates.
Buy-to-let purchases usually attract the higher rates for additional dwellings. From 1 April 2025 those rates in England and Northern Ireland are:
- up to £125,000 – 5
- £125,001 to £250,000 – 7%;
- £250,001 to £925,000 – 10%;
- £925,001 to £1.5m – 15%;
- above £1.5m – 17%.
Rates change from time to time, so please check the position with us before you commit to a purchase.
How does income tax work on buy-to-let?
As a landlord, you are liable to pay income tax on rental income. All rental income must be declared on your annual tax return and the amount paid will depend on your income tax banding (20%, 40% or 45%). There are some recent changes to what can be deducted from rental income, please see How has tax relief changed for landlords below.
Who pays Council Tax on buy-to-let?
In a rented property, it is usually the tenant that pays Council Tax. There are exceptions where the landlord is liable for Council Tax, such as flat-shares (or Houses in Multiple Occupation), and if the property is empty for a length of time. Properties rented to students are exempt.
How has tax relief changed for landlords?
Up until April 2017, landlords could deduct 100% of mortgage interest and other allowable costs from their gross rental income, before declaring their taxable income. This has been phased out by the government over three years and came into full effect in April 2020. Instead, landlords will receive a 20% reduction in tax liability. They are required to declare all of their income and then claim back 20% credit.
As a result of this, many landlords could find themselves in a higher tax bracket and be faced with significantly increased costs. It is wise to seek out the professional advice of an accountant to find out more about how this affects your financial position as a landlord.
As a landlord, why should I choose Treetops to be my accountant?
At Treetops based in Farnborough, we understand the pressures involved in being a landlord, especially with the recent changes made to tax benefits. Our professional yet friendly team can help you see the wood from the trees and relieve the burden of preparing tax returns and rental accounts.
Contact Treetops
Please call or email to arrange your FREE consultation for any of our services.
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