Tax Compliance

Rental Accounts and Property Tax

If you rent out a property, it is imperative that the rental income is declared to HMRC on your self-assessment tax returns. This applies even if you do not make a profit on the rental of your property.

When you have rental income and expenditure, the specific rules governing property mean that the preparation of your rental accounts and self-assessment tax return is not as simple as you might hope.

At aventae, we simplify this complexity for landlords, ensuring full compliance while actively reviewing your tax position for opportunities to minimise your tax liabilities.

Key property tax challenges we address

The UK property tax landscape is complex, with specific rules that can significantly impact your net profit:

Mortgage interest relief (Section 24)

When rental property is owned by an individual, any mortgage interest on the loan cannot be deducted directly from the rental income to calculate a net taxable profit
Instead, the mortgage interest is given as a tax credit at the basic rate of tax to reduce your tax liability
If you are a higher-rate or additional-rate taxpayer, this can often result in more tax being payable on your rental income even though in your mind, you haven't actually made a meaningful profit

Allowable deductions

The rules for calculating rental profit mean that the full cost of replacing equipment, such as a fridge or freezer, may not be allowable as a deduction and requires careful consideration
We ensure you correctly claim for replacement of domestic items relief (like furniture, appliances, and kitchenware) and correctly differentiate between allowable repairs and non-deductible capital expenses (improvements).

Registering losses

If you’re making a loss on your property income, we are keen for you to prepare your rental accounts and include them in your self-assessment tax return
We ensure any losses are registered with HMRC to be available for use in the future against subsequent rental profits.

Undisclosed rental income and disclosure

It’s crucial to declare this income to HMRC, and we can assist with registering your rental income
Late notification of rental income requires a disclosure to HMRC
We will make the appropriate disclosure with HMRC, presenting your case in the best possible light to minimise any tax liabilities and penalties that might apply.

What we can do for you

For owners of rental property

Reviewing your property ownership and your tax implications for all taxes

Preparation of accurate data for HMRC

Complete and file your rental accounts and tax returns to HMRC

Managing your Making Tax Digital (MTD) responsibilities

Keep mindful of tax planning opportunities

Ready to maximise your property investment?

Whether you are a new landlord or have a portfolio of properties, our proactive and trusted property tax service ensures compliance and tax planning.

Our five-step process goes like this:

Initial review

Learning about your letting accounts, your property and how it is owned, the tax position of the people that own it, how we can improve that, and are we a good match for your accounts and tax planning

Account preparation

We’ll help you gather and organise all rental income and expenditure records for better visibility. We’ll accurately prepare your rental accounts according to UK tax law

Self-assessment filing

Filing the required pages (SA105) within your Self-Assessment Tax Return

Tax planning review

Reviewing your tax position allows us to apply all available reliefs and allowances

Ongoing support

As your property investment changes we’ll make sure your accounts and tax needs are always met, as part of our holistic, proactive tax compliance services.

Get in touch

Let's get started on your rental accounts and property tax compliance today.

Get Started