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Expert Tax Tips for Landlords and Small Business Owners

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Running a business or renting out property can feel like a full-time job. And when tax season rolls around, it often brings more stress than anything else. But it doesn’t have to be that way. Whether you’ve got a few properties or run a local shop, getting your tax sorted the right way can save you time, money, and a few headaches. Here are some straight-up tips that can help.

1. Keep Track of Your Money

One of the most important things you can do is keep proper records. It might sound boring, but it saves you a world of trouble later.

Write down or log:

  • All the money coming in (rent, sales, cash jobs)

  • Every bit you spend on the business or property (repairs, travel, insurance)

  • Any receipts or invoices – even the small ones

Don’t wait until January to dig through a drawer of crumpled receipts. If it helps, use an app or a notebook – whatever works for you. The cleaner your records, the less likely you are to overpay tax or get a fine.

2. Understand What Expenses You Can Claim

HMRC lets you claim back some of what you spend to keep your business or property running – they call these “allowable expenses.”

If you’re a landlord, you can usually claim for:

  • Repairs and maintenance

  • Letting agent or management fees

  • Landlord insurance

  • Council tax or bills (if you pay them)

  • A portion of your mortgage interest

If you run a small business, think about:

  • Phone bills and office supplies

  • Travel and fuel (but not the commute)

  • Advertising and website costs

  • Accountant fees

  • Equipment or tools

If you’re not sure whether something counts, it’s always better to ask than assume.

3. Choose the Setup That Suits You

The way you set things up – whether you’re a sole trader, limited company, or running property through a separate company – affects how you’re taxed.

  • Sole trader: Easy to set up and manage. You pay income tax on your profits.

  • Limited company: You pay corporation tax, and can then take money as a salary or dividend – this can work out cheaper, especially if you’re earning more.

  • SPV (Special Purpose Vehicle): Landlords sometimes use this to buy property through a company. It can save tax but also comes with more paperwork and costs.

It’s not about what sounds fancier – it’s about what fits your situation.

4. Make Use of Tax-Free Allowances

There are a few tax breaks people often forget to use:

  • Personal allowance: You don’t pay tax on the first £12,570 you earn.

  • Property allowance: If you make under £1,000 from rent (say from Airbnb), you might not need to report it.

  • Rent-a-Room scheme: Rent out a room in your own home and earn up to £7,500 tax-free.

  • Dividend allowance: If you own a company and pay yourself in dividends, the first £500 is tax-free.

  • Pension contributions and donations: These can lower your tax bill too.

Don’t leave free money on the table.

5. Plan for Capital Gains Tax

If you sell a rental property or your business, you’ll likely have to pay Capital Gains Tax on the profit. But there are ways to reduce it:

  • Keep proof of what you spent on improvements (e.g. an extension or new roof)

  • If you lived in the property, you might get Private Residence Relief

  • Business owners might qualify for a lower rate with Business Asset Disposal Relief

Talk to someone before selling – you could save a lot.

6. Prepare for Making Tax Digital

HMRC is slowly rolling out Making Tax Digital. It means you’ll have to:

  • Keep records digitally

  • Send tax info to HMRC every quarter using approved software

If you’re VAT-registered, this already applies to you. For landlords and small businesses earning over £50,000, it kicks in from April 2026.

Don’t leave this till the last minute. Using tools like QuickBooks or Xero can make life easier—and if you hate software, your accountant can help manage it all.

7. Avoid Late Filing and Penalties

Missing tax deadlines can lead to fines—even if you owe nothing.

Here are a few dates to remember:

  • 31 Jan: Self-Assessment tax return due

  • 6 April: New tax year starts

  • Quarterly: VAT returns (if you’re VAT registered)

  • Every pay run: If you’ve got staff, you need to file PAYE info in real time

Set calendar reminders, or better yet, let an accountant take care of it so you don’t have to worry.

8. Get Help When You Need It

You don’t have to figure all of this out on your own.

A good accountant won’t just “do your books”—they’ll:

  • Help you claim everything you’re entitled to

  • Make sure you’re not overpaying tax

  • Handle the paperwork so you don’t have to

  • Give you advice based on your real situation

At FD Accountants, we offer fixed fees and straight answers—no nonsense, no surprise bills.

9. Plan Ahead for the Financial Year

The earlier you start planning for your tax, the better your chances of keeping more of your money.

  • Spread income or sales across tax years if you can

  • Buy tools or equipment before year-end to get the write-off

  • Look at how you’re taking money out of your business—dividends, salary, or both?

Waiting until January limits your options. Thinking ahead gives you control.

10. Stay Compliant, Stay Stress-Free

HMRC doesn’t mess around. If something’s wrong on your return—even if it was a mistake—you could be fined.

By keeping records, staying up to date with changes, and getting help when needed, you’ll avoid problems and stay focused on what matters—your work, your property, your life.

Frequently Asked Questions

1. Do I really need to keep every receipt?
Yes. Keeping receipts helps you prove your expenses if HMRC ever checks your return. It also makes it easier to claim everything you’re entitled to.

2. What expenses can I claim as a landlord?
You can claim for repairs, insurance, letting agent fees, some bills, and a portion of your mortgage interest. Big improvements (like extensions) can’t usually be claimed straight away.

3. Can I claim tax back on my home office or travel?
Yes—if it’s for work. You can claim for a portion of home bills or mileage when travelling for business. Just make sure you keep records.

4. Is it better to be a sole trader or a limited company?
It depends on how much you earn. Sole traders are simpler, but limited companies can save tax if you’re earning more. It’s worth talking it through with an accountant.

5. Do I need to report my rental income if I only rent out one property?
Yes. HMRC needs to know about all rental income—even if you’re making a loss. You might still need to file a tax return.

6. What’s the deadline for filing my tax return?
The deadline for Self-Assessment is 31 January each year. File it late, and you could get fined—even if you don’t owe tax.

7. Can I get a tax refund if I’ve overpaid?
Yes. If you’ve paid too much tax or missed claiming expenses, you might be owed a refund. An accountant can help sort that out.

8. What’s Making Tax Digital and how does it affect me?
It means you’ll need to keep digital records and send tax updates to HMRC every few months. It’s rolling out to landlords and businesses from April 2026.

9. What if I sell a property or my business—do I pay extra tax?
Yes. You may need to pay Capital Gains Tax. But there are ways to reduce it—like claiming for improvements or using certain reliefs.

10. Do I really need an accountant, or can I do it myself?
You can do it yourself—but a good accountant will help you claim more, stay compliant, and avoid fines. It often saves more than it costs.

Summary

Tax doesn’t have to be scary. It’s just about knowing the rules and using them to your advantage. Keep good records, ask questions, and don’t wait until the last minute. Contact us and see how we can help you and your business.