Accountants for landlords in Newcastle

How is rental income taxed?

If you receive rental income, you generally need to report it to HMRC and pay tax on the profit, which is the rent you receive less your allowable expenses. For most individual landlords this is done through a Self Assessment return each year. The profit is taxed alongside your other income, so your rental earnings can push part of your income into a higher tax band.

Where a property is owned jointly, the income is usually split and reported by each owner, and couples in particular have planning options worth a look. We make sure the right person reports the right share.

What costs can landlords deduct?

You can deduct the running costs of letting a property to arrive at your taxable profit. The costs landlords can commonly claim include:

Can I still deduct my mortgage interest?

Not in the way landlords once could. The way you get relief for mortgage interest and other finance costs on residential lets changed in recent years. Rather than deducting those costs in full from your rental income, individual landlords now generally get relief as a reduction to the tax bill, based on a basic-rate percentage of the finance costs. For higher-rate taxpayers this is less generous than the old full deduction, and it can also affect the income figure used for other purposes.

Because of these changes, some landlords ask whether holding property through a company is better. It can be, but it brings its own costs and tax consequences, including on transferring existing properties in, so it is a decision to model carefully rather than assume. We will run the comparison for you.

Capital Gains Tax when you sell

When you sell or otherwise dispose of a let residential property at a gain, Capital Gains Tax may be due. The catch is that there is a dedicated deadline for reporting and paying the tax on UK residential property disposals, and it is much shorter than the normal Self Assessment timetable, typically within a set number of days of completion. That makes it something for careful tax planning before you sell, not after. Reliefs and the annual exempt amount can reduce the bill, but both have been subject to change.

We help landlords estimate the gain in advance, make the most of the reliefs available and meet the reporting deadline, so a sale does not turn into a penalty. As with every figure on this page, we confirm the current rates, allowances and time limits on GOV.UK for the year of your disposal.

How Making Tax Digital affects landlords

Making Tax Digital for Income Tax applies to landlords as well as sole traders. From 6 April 2026 it is due to apply to landlords with qualifying income over £50,000, who will keep digital records and send HMRC quarterly updates instead of one annual return. Later phases are planned for those over £30,000 from April 2027 and over £20,000 from April 2028. These dates are announced government policy and the detail can change, so confirm your own start date on GOV.UK. We get landlords onto digital records ahead of time, so the switch is painless, see our Making Tax Digital service.