Landlord Accountant in Leeds: Section 24, FHL Changes & Cost

If you’re a landlord in Leeds searching for accounting help, you’re likely trying to solve one of a few things: understanding how Section 24 affects your actual tax bill, making sure you’re claiming every allowable expense, or deciding whether to hold property personally or through a limited company. Two significant changes have reshaped landlord tax recently — the Furnished Holiday Lettings regime was abolished in April 2025, and the Renters’ Rights Act is reshaping compliance obligations from May 2026 — so guidance that hasn’t caught up with either is missing genuinely important detail.

This guide covers how rental income is taxed, the FHL abolition, what a landlord accountant in Leeds actually does, and what it costs.

Quick Answer

A landlord accountant calculates your rental profit correctly, applies Section 24 mortgage interest relief accurately, identifies allowable expenses, and files your Self Assessment or Corporation Tax return. Since April 2025, furnished holiday lets have lost their special tax treatment and are now taxed under standard property rules — a significant change for anyone running a holiday let in or around Leeds. You don’t need a physically local firm in Leeds — filing is entirely online, so what matters more is genuine, current property tax expertise and clear fixed pricing.

Key Takeaways

• Rental income is taxed at your marginal Income Tax rate after allowable expenses, via Self Assessment.
• Section 24 restricts mortgage interest relief for individual landlords to a 20% tax credit, not a full deduction.
• The Furnished Holiday Lettings regime was abolished from 6 April 2025 — holiday lets now follow standard property rules, losing full mortgage interest relief, capital allowances, and Business Asset Disposal Relief on sale.
• A £1,000 tax-free property allowance is available instead of itemising expenses, if that works out better for very small lettings.
• Capital Gains Tax on a residential property sale must be reported and paid within 60 days of completion, at rates now unified at 18%/24% with a £3,000 Annual Exempt Amount.
• The Renters’ Rights Act brings the biggest shake-up of the private rented sector in decades, with main provisions taking effect from 1 May 2026.
• Typical fees run £150–£400 depending on portfolio size.

Table of Contents

1. How Rental Income Is Taxed
2. Section 24: Mortgage Interest Relief Explained
3. The Furnished Holiday Lettings Regime Is Gone: What Changed
4. Capital Gains Tax on Rental Property: Current Rates
5. The Renters’ Rights Act: What Landlords Need to Know
6. Landlords in Leeds: What We See
7. Allowable Expenses for Landlords
8. What a Landlord Accountant Actually Does
9. A Worked Example
10. Do You Actually Need an Accountant?
11. How Much Does It Cost?
12. Common Mistakes People Make
13. Accountant Insights: What We See in Practice
14. Should You Hire an Accountant? (Decision Framework)
15. DIY vs Professional Accountant
16. Checklists
17. FAQs
18. Sources
19. Final Thoughts

How Rental Income Is Taxed

Rental income is added to your other income (employment, self-employment, dividends) and taxed at your marginal Income Tax rate, after deducting allowable expenses. It’s reported through Self Assessment for individual landlords, or through Corporation Tax if property is held through a limited company. A £1,000 tax-free property allowance is also available as an alternative to itemising expenses — useful for landlords with very low income or minimal costs, though it’s rarely the better option once genuine expenses exceed that figure.

Section 24: Mortgage Interest Relief Explained

Since April 2020, individual landlords can no longer deduct mortgage interest as a full expense against rental income. Instead, they receive a 20% tax credit on the interest paid. For higher and additional rate taxpayers, this means paying tax on rental profit at a higher effective rate than the headline Income Tax band would suggest, since the relief no longer matches their actual tax rate.

The Furnished Holiday Lettings Regime Is Gone: What Changed

This is the change most likely to catch out landlords relying on older guidance. The Furnished Holiday Lettings (FHL) regime — which previously let qualifying holiday let owners deduct mortgage interest in full, claim capital allowances on furniture and fittings, treat profits as relevant earnings for pension contributions, and access Business Asset Disposal Relief on sale — was abolished from 6 April 2025 for Income Tax and Capital Gains Tax (1 April 2025 for companies).

From that point, holiday let income and gains are taxed exactly like any other residential rental property: Section 24’s 20% mortgage interest credit applies instead of full deduction, capital allowances on furniture are lost (though the same expense-deduction rules as other rentals now apply), pension-relevant earnings treatment is gone, and Business Asset Disposal Relief no longer reduces the Capital Gains Tax rate on sale. For married couples or civil partners who split FHL profits unevenly, the default 50:50 income-splitting rule for jointly owned property now applies unless a Form 17 declaration and matching beneficial ownership change are put in place. The 2025/26 tax return — due 31 January 2027 — is the first return filed entirely under these new rules, and for leveraged holiday let owners, the tax bill is often noticeably higher than in 2024/25.

Capital Gains Tax on Rental Property: Current Rates

When you sell a rental property, Capital Gains Tax rates were unified from October 2024 — residential property no longer sits in a separate, higher-rate bracket. Gains are now taxed at 18% within the basic rate band and 24% above it, the same structure as most other assets. The Annual Exempt Amount — the tax-free portion of any gain — is £3,000, a significant reduction from £12,300 just a few tax years ago, which means considerably more landlords now face a reportable gain than in the recent past.

UK residential property sales must be reported and any tax paid within 60 days of completion, using HMRC’s dedicated online service — a much tighter deadline than the standard Self Assessment timeline, and one that catches out landlords who assume they have until the following January.

The Renters’ Rights Act: What Landlords Need to Know

Beyond tax, the Renters’ Rights Act 2025 received Royal Assent in October 2025 and represents the most significant overhaul of England’s private rented sector in decades, with main provisions taking effect from 1 May 2026. It affects an estimated 11 million private renters and 2.3 million landlords, ending Section 21 “no-fault” evictions and introducing new tenancy and compliance requirements. While this isn’t a tax change, it directly affects landlord costs and record-keeping, and it’s worth reviewing alongside your tax position rather than treating the two as unrelated — an accountant who understands the wider compliance picture can flag where increased costs (compliance, void periods, tenancy management) will show up in your figures.

Landlords in Leeds: What We See

Leeds has an active rental market, particularly around the student and young professional rental market, and we work with landlords ranging from accidental single-property owners to established portfolio investors. Section 24’s impact, the FHL abolition, and the personal-vs-company ownership question are the issues we’re asked about most.

The scale of the student market alone is significant — Leeds is home to well over 60,000 students across the University of Leeds, Leeds Beckett University, and Leeds Trinity, one of the largest student populations of any UK city outside London. This sustains strong, consistent rental demand in areas like Headingley, Hyde Park, and Woodhouse, where yields regularly exceed 7% — among the better returns available anywhere in the UK. That combination of strong yield and consistent tenant demand also means Leeds landlords have real numbers at stake when Section 24, FHL, or CGT rules aren’t applied correctly, and the shifting compliance landscape under the Renters’ Rights Act adds another layer worth reviewing alongside the tax position.

Allowable Expenses for Landlords

• Letting agent and management fees
• Repairs and maintenance (not capital improvements)
• Landlord insurance
• Ground rent and service charges
• Accountancy and professional fees

What a Landlord Accountant Actually Does

Beyond filing your return, a good landlord accountant models the real impact of Section 24 on your tax position, advises on how the FHL abolition affects any holiday let income, reviews whether incorporation would genuinely benefit you after CGT and SDLT costs, identifies allowable expenses you might miss, and advises on the 60-day Capital Gains Tax deadline when you come to sell.

A Worked Example

Illustrative Example: Say you’re a higher-rate taxpayer in Leeds with £18,000 annual rental income, £4,000 in allowable expenses, and £6,000 in mortgage interest. Your taxable rental profit is £14,000 (£18,000 minus £4,000 expenses — mortgage interest isn’t deducted here), taxed at 40%, giving £5,600 tax, less a 20% credit on the £6,000 interest (£1,200) — a net tax bill of £4,400, a meaningfully higher effective rate than the profit figure alone would suggest.

Illustrative Example: A landlord previously running a qualifying furnished holiday let with £6,000 in mortgage interest would, before April 2025, have deducted that interest in full against rental profit. Under the post-abolition rules, they instead receive only the 20% tax credit — the same £1,200 credit as in the example above — a substantial reduction in relief for anyone who hasn’t yet adjusted their expectations for the 2025/26 tax year.

Do You Actually Need an Accountant?

• You’re a higher-rate taxpayer affected by Section 24.
• You own a furnished holiday let and haven’t reviewed your position since the April 2025 abolition.
• You’re considering incorporating your property portfolio.
• You have multiple properties and want to make sure nothing’s missed.
• You’re planning to sell and need to understand the current Capital Gains Tax position.
• You’ve become an accidental landlord and aren’t sure of your obligations.

How Much Does It Cost?

Common Mistakes People Make

1. Not understanding Section 24’s impact
Why it happens: Many landlords assume mortgage interest is still a full deduction, as it was before 2020.
Consequence: A higher tax bill than expected, sometimes pushing landlords into a higher effective tax bracket despite unchanged rental profit.
How to avoid it: Have your accountant model your actual tax position under current mortgage interest relief rules.

2. Still assuming furnished holiday let tax advantages apply
Why it happens: The FHL regime existed for decades, and older guidance describing its benefits is still widely circulated online.
Consequence: Overclaiming mortgage interest relief, capital allowances, or Business Asset Disposal Relief that no longer applies from April 2025 onward.
How to avoid it: Confirm your holiday let is being treated under the current standard property rules for the 2025/26 tax year onward.

3. Claiming capital improvements as repairs
Why it happens: The distinction between a repair and an improvement isn’t always obvious.
Consequence: HMRC disallowing the claim and potentially charging penalties for an incorrect return.
How to avoid it: Check with an accountant before claiming any significant work as a repair.

4. Not considering incorporation without full analysis
Why it happens: Moving property into a limited company is often suggested as a Section 24 workaround without weighing the full picture.
Consequence: Incorporation can trigger Capital Gains Tax and Stamp Duty Land Tax charges that outweigh the ongoing tax saving.
How to avoid it: Get a full incorporation analysis before transferring any property into a company.

5. Missing the 60-day Capital Gains Tax deadline on sale
Why it happens: The 60-day reporting deadline for residential property gains is a separate, faster deadline than Self Assessment.
Consequence: Penalties and interest for late reporting, even if the gain is eventually reported correctly.
How to avoid it: Report and pay any Capital Gains Tax within 60 days of completion, not at the next Self Assessment deadline.

6. Under-claiming allowable expenses
Why it happens: Landlords, especially with a single property, often underclaim through unfamiliarity with what’s deductible.
Consequence: Paying more tax than necessary on rental profit.
How to avoid it: Review your allowable expenses list annually with an accountant.

Accountant Insights: What We See in Practice

• Landlords in Leeds’s student and young professional rental market consistently underestimate how much Section 24 has changed their effective tax rate since it was introduced.
• Former furnished holiday let owners are the group most likely to be caught out this tax year, having not fully adjusted their expectations to the post-April-2025 rules.
• Incorporation decisions made without full Capital Gains Tax and Stamp Duty modelling are one of the most common costly mistakes we see landlords make.
• Portfolio landlords with 3+ properties benefit disproportionately from a proper annual review, since small per-property errors compound across a larger portfolio.
• The 60-day Capital Gains Tax reporting deadline on residential property sales catches out even experienced landlords who are used to the longer Self Assessment timeline.

Should You Hire an Accountant?

Step 1: Understand your Section 24 exposure. Higher-rate taxpayers with significant mortgage interest are most affected.

Step 2: Review your position if you own a furnished holiday let. The April 2025 abolition means the rules you may have relied on no longer apply.

Step 3: Weigh incorporation carefully. Don’t transfer property into a company without full CGT and SDLT modelling.

Step 4: Review your allowable expenses. Make sure nothing is being missed year to year.

Step 5: Plan ahead for any future sale. Understand the 60-day Capital Gains Tax deadline and current 18%/24% rates before you need them.

DIY vs Professional Accountant

Checklists

Checklist 1: Annual Review

• ✓ Confirm rental income and allowable expenses
• ✓ Model your Section 24 mortgage interest position
• ✓ Confirm any holiday let is correctly taxed under post-FHL rules
• ✓ Review whether incorporation still makes sense
• ✓ Check for any planned property sales this year

Checklist 2: Choosing an Accountant

• ✓ Confirm genuine property tax experience, not just general Self Assessment
• ✓ Ask whether they’re up to date on the FHL abolition and Renters’ Rights Act
• ✓ Get a fixed fee quote in writing
• ✓ Confirm HMRC agent authorisation
• ✓ Ask how they handle the 60-day CGT reporting deadline

FAQs

How is rental income taxed?
Rental income is added to your other income and taxed at your marginal Income Tax rate, after deducting allowable expenses, through Self Assessment.

What is Section 24 and how does it affect landlords?
Section 24 restricts mortgage interest relief for individual landlords to a 20% tax credit rather than a full expense deduction, which can significantly increase the effective tax rate for higher-rate taxpayers with mortgaged property.

What happened to furnished holiday let tax relief?
The FHL regime was abolished from 6 April 2025. Holiday lets are now taxed under standard property rules, losing full mortgage interest deduction, capital allowances, pension-relevant earnings status, and Business Asset Disposal Relief on sale.

What is the current Capital Gains Tax rate on rental property?
18% within the basic rate band and 24% above it, following the October 2024 rate unification, with a £3,000 Annual Exempt Amount.

Should I hold property personally or through a limited company?
It depends on your tax position — companies pay Corporation Tax on profit and can deduct mortgage interest in full, but extracting profit personally has its own tax implications. This is worth reviewing individually with an accountant.

Can a landlord accountant in Leeds act for property elsewhere in the UK?
Yes. Rental income tax is filed through Self Assessment or Corporation Tax regardless of where the property is located, so your accountant doesn’t need to be based near the property.

What expenses can landlords claim?
Allowable expenses include letting agent fees, repairs and maintenance, insurance, ground rent, and a proportion of relevant professional fees, though not capital improvements. A £1,000 property allowance is also available as an alternative to itemising.

Do I need to register for Self Assessment as a landlord?
Yes, if you have rental income over £1,000 a year you generally need to register for and file Self Assessment.

What happens when I sell a rental property?
You may owe Capital Gains Tax on the increase in value, with a reporting and payment deadline of 60 days from completion for UK residential property.

What is the Renters’ Rights Act and does it affect my tax?
It’s a major overhaul of private rented sector regulation, not tax law directly, with main provisions from 1 May 2026 — but it affects landlord costs and compliance, which is worth reviewing alongside your tax position.

Sources

• GOV.UK — Work out your rental income when you let property
• GOV.UK — Tax relief for residential landlords (Section 24)
• GOV.UK — Abolition of the furnished holiday lettings tax regime
• GOV.UK — Report and pay Capital Gains Tax on UK property
• UK Parliament — Renters’ Rights Act 2025

Tax rates, thresholds, and the FHL and Renters’ Rights Act rules are set by HMRC and Parliament and subject to change — always confirm current figures on GOV.UK before relying on them.

Final Thoughts

Landlord tax has become considerably more complex recently — Section 24 remains a significant factor for higher-rate taxpayers, the FHL regime’s abolition has reshaped holiday let taxation entirely, and the Renters’ Rights Act is reshaping compliance obligations alongside it. The personal-vs-company ownership question still doesn’t have a one-size-fits-all answer. A landlord accountant in Leeds can model your actual position under current rules and make sure nothing is missed, whether you own one property or a growing portfolio.

Want it handled properly? Get in touch for a fixed-fee quote, or see our full pricing guide.

Written by:
Shamayun Chowdhury
Senior Accountant, Major Accountancy
Lecturer in Accounting, Nottingham Trent University
CIMA Qualified, 15+ Years Experience
Last Reviewed: August 2026