Most UK landlords overpay tax.
Not because rates are high — but because mistakes are common.
Here are 5 I see all the time:
1️⃣ Not Claiming All Allowable Expenses
Many landlords forget to claim things like:
• Letting agent fees
• Maintenance and repairs
• Insurance
• Accountant fees
• Mileage for property visits
Small costs add up — and reduce your taxable profit.
2️⃣ Confusing Repairs with Improvements
Repairs are usually tax-deductible.
Improvements are not immediately deductible.
Example:
✔ Replacing a broken boiler = repair
✖ Installing a brand-new luxury heating system = improvement
Misclassifying this can trigger HMRC issues.
3️⃣ Poor Record Keeping
With Making Tax Digital expanding, digital records are becoming essential.
If your paperwork is messy:
• You miss expenses
• You risk penalties
• You overpay tax
Good bookkeeping saves money.
4️⃣ Ignoring Mortgage Interest Rules
Since the Section 24 changes, mortgage interest relief works differently.
You no longer deduct it from rental income.
Instead, you receive a 20% tax credit.
Higher-rate taxpayers often feel this impact the most.
5️⃣ Not Planning for Capital Gains Tax (CGT)
When selling a rental property, landlords are often shocked by the tax bill.
Without proper planning:
• You could pay more than necessary
• You may miss available reliefs
Planning ahead makes a significant difference.
If you’re a UK landlords, reviewing these areas could potentially save thousands.
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