Accountants for HMO and multi-let landlords
If you run an HMO, a student let or a small mixed-use building, your tax position looks nothing like a single buy to let. Rent arrives per room, the bills sit with you rather than the tenant, licensing and fire safety work runs alongside ordinary repairs, and a shop on the ground floor pulls a second set of rules into the same return. Four questions come first: which conversion, fire safety and licensing costs are revenue and which are capital, whether your common parts and non-dwelling space carry a capital allowances claim, how council tax or business rates are landing on the building, and whether the profit is better held personally or in a company. Those four are written up against your own figures, and a specialist firm prepares the returns.
What lands on your desk
What you are dealing with
Which HMO costs are revenue and which are capital
This line decides your bill, and HMO work sits right on it. Replacing a worn fire door like for like is normally a repair against this year's rent. Fitting fire doors, an alarm system and a protected escape route into a house that never had them, as part of turning it into an HMO, is improvement expenditure that goes to your capital base and waits for a sale.
Bills-included rent and what you can deduct
Multi-let rents are usually quoted with gas, electricity, water, broadband and sometimes cleaning built in. The whole rent is taxable income, and the bills are deductible where they are incurred wholly and exclusively for the rental business, so you are taxed on the margin rather than the headline. Two things catch people out: once rooms are empty you still carry the utilities and the council tax on the whole building, and any part you or your family occupy comes out of the claim. The portfolio profitability calculator runs the real numbers before you set next year's room rates.
Council tax and business rates on an HMO
Since 1 December 2023 an HMO in England is treated as a single dwelling for council tax, with one band and one bill, and the liability sits with you as owner rather than with the tenants. Older per-room bandings stay on the list until reviewed. Because the bill is yours, void-period council tax is a genuine deductible cost. Where a building has a real commercial element, that part can fall into business rates instead, a separate assessment with its own reliefs.
Capital allowances on common parts and mixed-use space
Plant inside a dwelling-house is barred from capital allowances in a property business by CAA 2001 s.35. HMOs and mixed-use buildings are the exception worth checking. Plant in the common parts, such as a communal boiler, a lift or stair lighting, can qualify, and so can integral features in space that is genuinely not a dwelling: a ground floor shop, office or commercial unit. From April 2026 the main pool writing-down allowance is 14%, the special rate pool stays at 6%, and the Annual Investment Allowance is £1m. Size a claim with the capital allowances calculator, and the mechanics sit in the s.35 common parts guide.
Whether a company suits a high-yield portfolio
HMOs are geared and yield-heavy, so the Section 24 finance cost restriction bites hard. As an individual you do not deduct mortgage interest from rental profit; you get a basic rate reducer instead, 20% for 2026/27 and rising to the new 22% property basic rate from 2027/28. A company deducts interest in full before corporation tax. That is not the whole answer: incorporating triggers capital gains tax and stamp duty land tax unless a relief applies, and companies under common control share one set of corporation tax limits rather than a full £50,000 band each. The rental income tax calculator gives the personal side first.
What a specialist reviews
What a specialist reviews
A review of conversion and refurbishment spend
A specialist works through the invoices behind each building and splits them into repairs, improvements and qualifying plant, with a note against each judgement, documented at the time rather than reconstructed later if HMRC asks.
A capital allowances position for non-dwelling space
Where a building has communal plant, integral features or a commercial unit, a specialist identifies the qualifying expenditure and checks the s.35 boundary, and on a commercial purchase checks whether a s.198 fixtures election was agreed inside the two-year window.
A structure comparison before you commit
A specialist models personal ownership against a company on your actual rents, interest and drawings, and prices the move itself: capital gains tax, stamp duty land tax, and the corporation tax limits shared across associated companies.
Returns, accounts and quarterly filings prepared
Your accountant prepares the self assessment or the company accounts and corporation tax return, keeps licensing fees and running costs in the right period, and sets up the digital records Making Tax Digital for Income Tax needs before your start date.
FAQ
Frequently asked questions
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