Interest on buy to let motgages

The Chancellor's summer budget introduced changes to the tax relief available on borrowings to fund buy to let properties owned by individuals.


At present, interest on a mortgage to buy the property is deducted from the rent before the net profit is taxed.


From 5 April 2017 changes will be introduced that will mean that, by 5 April 2028 only basic rate tax relief will be available on the interest charges.


If you remain a basic rate taxpayer there will be no change to your tax liability. However, if you pay tax at higher rates, 40% or 45%, the tax liability on rental properties funded by mortgage will increase.


It is possible to restructure your affairs so that this change does not actually affect you but, obviously, the restructuring and ongoing costs would need to be less than the tax saved to make it worthwhile. If you think this might affect you, please contact us to discuss your options.

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Fraudulent tax demands and refunds

MTD takes effect for all VAT returns beginning on or after 1 April 2019. This means all VAT returns must be filed electronically using compliant software and not just by entering figures through the HMRC portal as might currently be the case.

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