Accountants for first-time and accidental landlords
You did not plan to be a landlord. You moved in with a partner, relocated for work, inherited a house, or could not sell, and now your old home is let. HMRC treats you as a landlord from the first day of the tenancy, with a return, records and a deadline attached. A specialist looks at four things first: when the letting began and whether HMRC has been told in time, whether your rent sits above or below the £1,000 property allowance, how the mortgage interest runs through Section 24, and how long the property was your own home, because that decides the relief when you sell. Wherever the property is, and whether you are an accidental landlord or a new landlord by choice, those four are worked through by video call, phone and email.
What lands on your desk
Your first year as a landlord: what HMRC expects
Telling HMRC and registering in time
Rental income does not reach HMRC through your payroll, so the duty to notify is yours. The deadline is 5 October after the end of the tax year the letting started in, and the return and payment follow by the next 31 January. Miss it and Schedule 41 Finance Act 2008 failure-to-notify penalties run as a percentage of the tax, though an unprompted disclosure of a non-deliberate failure can reach nil where HMRC learn of it within twelve months of the tax first going unpaid. Background sits in the accidental landlord guide and the first-time landlord guide.
The property allowance against real expenses
Where your share of gross rent is £1,000 or less, the property allowance covers it and there is normally nothing to report. Above that you choose each year: the flat £1,000 instead of your costs, or the real expenses. It is per person, so joint owners have one each. The trap is that the allowance and the Section 24 credit cannot both be used in the same tax year, so a mortgaged former home usually claims real expenses. Letting a room in the home you live in to a lodger is a different regime, rent-a-room, and the property allowance cannot be used on that same income. The rental income tax calculator compares the two.
Section 24 and the 20% credit on a first return
Mortgage interest is not deducted from rental profit. You get a basic rate tax credit instead, 20% for 2026/27, capped at the lowest of 20% of the finance costs, 20% of the rental profit before finance costs, and 20% of your income above the personal allowance. What the cap blocks carries forward. For an employed landlord it can lift total income into higher rate territory. The Section 24 calculator puts a number on it.
Consent to let and the mortgage
A residential mortgage usually needs the lender's consent to let before the tenancy starts, and the lender may add a rate premium or move you to buy-to-let terms. That is a lending question, not a tax one: it changes neither the property business nor the notification deadline. It does change your figures, because the new interest runs through Section 24.
Records that will satisfy Making Tax Digital
Making Tax Digital for Income Tax is mandatory from 6 April 2026 above £50,000 of qualifying income, from 6 April 2027 above £30,000, and from 6 April 2028 above £20,000. Qualifying income is gross rent plus any gross self-employment turnover, before deductions, so a small profit does not keep you out, and joint owners test their own share. The MTD checker tests your figures.
Selling later, and relief for the years it was home
The gain is split across your whole period of ownership. Years it was genuinely your main residence are covered by private residence relief, and the final nine months always qualify where it was your main home at some point. Letting relief applies only where you shared occupation with the tenant. Residential rates for 2026/27 are 18% and 24% after the £3,000 annual exempt amount, and where tax is due you report and pay within 60 days.
How we help
What a specialist reviews for a new landlord
The first return, from the start date
The starting point is when the letting began, whether notification is already late, and which tax year the first return belongs in. One of our accountants for landlords prepares the registration, the property pages and the computation, and sets out what is payable and when.
Allowance against expenses, on your figures
The rent, finance costs, repairs, agent fees, insurance and the pre-letting spending that is often missed all go into one schedule, and the £1,000 allowance is then compared against real expenses on your own figures for the year.
A record system that carries into MTD
Your gross figures decide whether you fall into the April 2026, 2027 or 2028 cohort, and a jointly owned property is tested on your share rather than the whole. From there the digital records and the quarterly filing pattern are set up in recognised software before the first quarter runs.
Late notification put right
Where the 5 October deadline has already passed, your accountant prepares the notification and the computation together, so HMRC hears about the letting and the figures in one go. Where earlier years were missed altogether, the review sets out whether the Let Property Campaign is the route.
Not sure which of these applies to you? A free consultation sets out where you stand, with no obligation.
Book a free consultationFAQ
Frequently asked questions
Yes, if your share of the rent is more than £1,000 for the tax year. A part-year letting still creates a property business for the months it ran. You have until 5 October after the end of that tax year to notify HMRC, and the return follows by 31 January. At or below £1,000, the property allowance normally covers it.
It depends on your costs. If real expenses come to less than £1,000 and there is no mortgage, the flat allowance is simpler and usually better. With a mortgage it is usually worse, because the allowance and the Section 24 credit cannot both be used in the same tax year. It is per person, so joint owners have £1,000 each.
It reduces relief over time rather than removing it. The gain is apportioned across your ownership, the years it was your main residence stay covered by private residence relief, and the final nine months always qualify where it was your main home at some point. Only the letting years outside that are exposed, taxed at 18% or 24% in 2026/27 after the £3,000 annual exempt amount.
From 6 April 2026 where qualifying income is above £50,000, from 6 April 2027 above £30,000, and from 6 April 2028 above £20,000. Qualifying income is gross rent plus any gross self-employment turnover, before deductions, so a landlord with £52,000 of rent and £40,000 of costs is in scope. Joint owners test their own share rather than the property total.
It is fixable, and disclosing before HMRC contacts you matters. Failure to notify is penalised as a percentage of the tax under Schedule 41 Finance Act 2008, but an unprompted disclosure of a non-deliberate failure can reach a nil penalty where HMRC learn of it within twelve months of the tax first going unpaid, and has a 10% floor after that. The Let Property Campaign is the standard disclosure route for residential landlords with undisclosed rent.
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