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Buy to Let Accountant

In the United Kingdom, buy-to-let property is still commonly regarded as a sound investment, with strong capital growth potential and the promise of a stable rental income. Following the coronavirus outbreak, the market is beginning to show signs of recovery, and rental prices have continued to rise, giving existing and prospective investor’s confidence.

Given the government’s recent wave of adjustments to landlord tax benefits, it’s fair to say that rental property isn’t exactly the golden goose it once was. Mortgage interest reduction (MRI) for landlords expired in April 2020, after being phased off since 2017. More adjustments to the Capital Gains Tax are also on the way. However, when properly managed, buy to let still offers an excellent passive income opportunity, and real estate itself is rarely a bad investment.

What Counts as Buy to Let Property?

A rented property or one that has been purchased with the intention of being rented out to tenants rather than being lived in by the buyer is known as a buy-to-let property.

The idea with these properties is to generate a passive revenue stream by charging higher rent than the expense of financing and maintaining the property. Many investors also hope to profit from capital appreciation or by selling the property for a higher price than they paid for it when they first bought it.

Because the primary purpose of owning one of these properties is to make a profit, it’s critical to assess the whole cost of buying and maintaining it before making a purchase. These considerations should include the tax implications – and potential tax savings – that owning buy to let properties creates.

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Why Do Landlords Need a Buy to Let Accountant?

It pays to be well-informed about these buy-to-let developments and how they will affect you as a landlord. An experienced buy to let accountants‘ knowledge and expertise can be essential in providing guidance and identifying tax efficiencies in this sector.

What Are My Financial Responsibilities as a Landlord?

You have a lot of financial and administrative duties as a landlord. You must register for self-assessment and file annual tax returns if you have personal rental income. If your property is owned by a limited business, you must file annual accounts and tax filings as well.

Even for the most experienced landlords, navigating the financial landscape, in addition to the myriad other responsibilities you have as a buy-to-let property owner, can be complex and onerous. Pearl Lemon Accountants will alleviate some of the stress, allowing you to focus on other aspects of being a successful landlord.

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Buy To Let and Limited Companies

Personal ownership, a regular Limited Corporation, or a Special Purpose Vehicle (SPV), which is a basic sort of company that may be set up to hold a property, are the three major ways to purchase a buy-to-let property. Many are considering incorporation/SPV as a result of recent changes in legislation; there are several advantages to this, including the ability to completely deduct mortgage and finance charges.

When you buy and manage your property through a limited company, you take on the obligations of a company director, which include compiling accounts and filing returns with Companies House and HMRC. Using a specialist buy-to-let accountant who is familiar with buy-to-let firms will ensure that you get the best advice from the start and relieve you of this administrative burden.

Buying Rental Properties Through a Limited Company

If you are considering going into the buy to let property market as a limited company, it pays to work with a buy to let accountant like those on the Pearl Lemon Accountants team right from the start. We can help every step of the way, from helping you determine how best to finance your buy to let purchase to setting up the LLC that will purchase it to making sure that you take full advantage of the tax benefits that still exist for business based buy to let landlords.

Tax Advantages of Buying as a Limited Company

The tax advantages are the primary benefit of purchasing a property through a limited business for most people who do so.

To elaborate, if you are a higher-rate taxpayer, then a limited business will make sense. In 2021, landlords who own rental property through a limited company would pay corporation tax on their profits at a substantially lower rate of 19 percent, rather than paying income tax at up to 45 percent.

In the past, you could use considerable mortgage tax relief to offset your income tax. Private landlords could claim tax relief on their mortgage interest based on their income tax rate, which could be as high as 45 percent for those paying the highest rate.

This relief has been gradually lowered since 2017, and landlords will only be allowed to claim relief at the basic tax rate of 20% this fiscal year.

For example, if a landlord paid the highest rate of tax and had an interest-only buy-to-let mortgage of £1,850 per month prior to 2017, they could have received £830 in tax relief from HMRC. This would now be just £370 under the new guidelines.

Tax Report
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What about the concept of limited liability?

Another benefit is that if you manage your buy-to-let business as a limited company, is that it will be legally distinct from your personal financial activities, allowing you to avoid personal liability for any losses incurred.

Are there any tax advantages for heirs?

Purchasing a buy to let home as a limited company may be a strategy to reduce the amount of inheritance tax your family pays. You might be able to accomplish this by making them shareholders in your limited business, but as your buy to let accountant, your Pearl Lemon Accountants team will be able to advise you if that would be the right move for you to make.

Why Choose Pearl Lemon Accountants as Your Buy-to-Let Accountant?

We understand the pressures that come with being a landlord at Pearl Lemon Accountants, especially with the latest changes to tax benefits. Our knowledgeable, yet approachable team can help you see the forest for the trees and take the stress out of tax returns and rental accounts.

We can also advise you on Capital Gains Tax and look for tax efficiencies to help your buy-to-let home or business thrive. We can help you set up an LLC if needed, and take care of the accounting involved in running that. We can do even more, if needed.


Absolutely. Running a rental property can often be stressful, and having a good real estate tax accountant can relieve some of that pressure. 

An accountant can also help to file your taxes on time and accurately. They can also assist in improving your overall portfolio profitability.

For more information, book a call with our experts today!

Essentially, accountants can assist in managing any aspect of your property’s finances. They can help with many services, including VAT insights, developing tax returns for landlords, and even communications with the tax office.

If you would like more information, please book a call with our experts!

Hiring a real estate accountant can be very beneficial to property owners mainly because they can assist with managing all of your property’s finances.

They can also help with the organisation of your bookkeeping, develop tax returns for landlords, and so much more. Having an accountant onboard can also get you additional tax benefits when you file at the end of the year.

For more information, book a call with our experts today!

Let’s Talk Accountancy.

Contact us today
and let's chat about how we can help you as your expert buy to let accountant.

Let’s Talk Accountancy.

Get in touch today, so we can discuss your accountancy needs, your business, your hopes for the future and just how Pearl Lemon Accountants can help you.