Do I Need an Accountant If I Rent Out a Property

Do Landlords Legally Need an Accountant

You are not required by law to hire an accountant if you rent out property in the UK. Many landlords manage their accounts themselves, especially if they only own one property or earn a modest amount of rental income.

However, once your rental activity becomes more complex for example, if you own multiple properties, rent to companies, or hold property through a limited company professional help becomes much more valuable. An accountant ensures you declare income correctly, claim all allowable expenses, and avoid mistakes that could lead to HMRC penalties.

What an Accountant Does for Landlords

A property accountant helps you manage all financial and tax aspects of renting out property. Their responsibilities can include:

• Preparing and submitting your annual Self Assessment tax return.

• Recording income and allowable expenses accurately.

• Calculating and advising on Capital Gains Tax (CGT) when selling a property.

• Ensuring you stay compliant with HMRC’s Making Tax Digital requirements when they apply to landlords.

• Advising on whether to hold property personally or through a limited company for tax efficiency.

• Helping you prepare for changes in tax legislation affecting landlords.

Their goal is to ensure your rental business runs smoothly and that you pay the correct amount of tax no more and no less.

When an Accountant Is Most Helpful

While simple cases can be managed independently, there are specific scenarios where hiring an accountant can save time, stress, and money.

1. Multiple Properties or Higher Income
If you own several rental properties or have income from different sources, keeping track of everything can become complicated. An accountant ensures all figures are accurate and that income and expenses are recorded correctly across each property.

2. Limited Company Landlords
If you operate through a limited company, you must file annual accounts with Companies House and submit a Corporation Tax return. This requires professional accounting knowledge, so a qualified accountant is essential.

3. Selling or Transferring Property
When selling a property, you may owe Capital Gains Tax. An accountant can calculate your gain, apply available reliefs, and help you minimise your tax liability. They can also advise on inheritance planning or transferring ownership between spouses.

4. Complex Deductions or Tax Reliefs
HMRC allows landlords to claim several expenses, such as repairs, letting agent fees, insurance, and mortgage interest (restricted for individual landlords). An accountant ensures you claim everything you are entitled to while following the rules correctly.

5. Non-Resident Landlords
If you live outside the UK but rent out a UK property, you are subject to the Non-Resident Landlord Scheme. An accountant can register you with HMRC, ensure the right amount of tax is withheld, and help reclaim overpaid tax if necessary.

How an Accountant Helps You Stay Compliant

Tax rules for landlords can change frequently. For example, mortgage interest tax relief was replaced by a 20 percent tax credit for individual landlords, and the reporting deadline for Capital Gains Tax on property sales has been reduced to 60 days.

An accountant keeps track of these changes and ensures your returns are filed correctly and on time. This reduces the risk of penalties for late or inaccurate submissions and keeps you compliant with all HMRC requirements.

They can also prepare you for Making Tax Digital (MTD), which is expected to apply to landlords earning over £50,000 from April 2026. Under MTD, landlords must use digital record-keeping software and send quarterly updates to HMRC.

Tax Savings an Accountant Can Help You Identify

A skilled accountant does more than calculate your tax bill. They can identify legitimate opportunities to reduce it, such as:

• Claiming Repairs and Maintenance expenses.

• Using Replacement Domestic Items Relief for furniture or appliances.

• Allocating expenses between personal and business use accurately.

• Structuring ownership between spouses to make use of both tax allowances.

• Advising on pension contributions or investments to offset taxable income.

By applying these strategies, landlords often save more in reduced tax than they pay in accounting fees.

Record Keeping and HMRC Audits

Landlords must keep detailed records of rental income and expenses for at least five years after the tax year ends. Poor record keeping is a common reason for HMRC disputes or incorrect returns.

An accountant helps you set up a reliable record-keeping system, often using accounting software that links to your bank accounts. This ensures you can quickly provide evidence if HMRC ever questions your figures.

If you are selected for an audit, your accountant can communicate with HMRC on your behalf, making the process far less stressful.

Example: How an Accountant Can Save You Money

Imagine you earn £20,000 in rental income from two properties and have £6,000 in expenses. Without professional help, you might forget to claim £1,500 worth of allowable costs such as letting agent fees, insurance, or service charges.

An accountant would identify and include those deductions, reducing your taxable income to £12,500 instead of £14,000. Depending on your tax rate, this could save you several hundred pounds in tax more than covering the accountant’s fee.

What It Costs to Hire an Accountant

The cost of hiring an accountant varies depending on the size of your property portfolio and the complexity of your finances.

• A simple Self Assessment for a single property might cost between £200 and £400 per year.

• A landlord with multiple properties or a limited company could expect to pay £600 to £1,200 or more annually.

Although this is an extra expense, most landlords find that the tax savings, accuracy, and time saved justify the cost.

Summary

You do not legally need an accountant to rent out a property, but professional support can make a big difference. An accountant ensures your tax returns are accurate, helps you claim every allowable expense, and keeps you compliant with HMRC’s evolving rules.

For landlords with multiple properties, complex income, or limited companies, an accountant is almost essential. Even for smaller landlords, their advice can prevent errors, save money, and make managing rental finances far easier.

In short, while you can handle your accounts yourself, a good property accountant pays for themselves many times over by helping you stay compliant, efficient, and financially secure.