More landlords than ever are choosing to operate through limited companies. But what does that actually involve? Whether you’re considering incorporation or just want a clearer picture, this guide walks you through the journey from setup to maintaining the Company. And remember, you can always contact your friendly Landlord Lab Finance team for help and advice.
Why Set Up a BTL Company?
The main reason landlords incorporate is to mitigate the impact of Section 24 which was introduced in 2016. This restricts mortgage interest relief for individuals. In contrast, limited companies can fully offset mortgage interest as a business expense, often leading to significant tax savings for higher-rate taxpayers.
Other benefits include:
- If looking to retain profits and build wealth the Corporation Tax rate starting at 19% is attractive compared to income tax
- Ownership flexibility can be used to maximise your tax efficiency
- This is a business and it makes sense to structure it accordingly
- There are more opportunities for lowering your tax bill through proper planning
Steps to setting up a Company
This is the information you will require.
- Company Name
- Full names and ID for all Directors
- Full names and ID for all Shareholdes
- How you want the shares structured and allocated
Landlord Lab Finance can take this information and set you up withing a day for a fixed fee. With the information you provide they will register the Company with Companies House, choose the correct SIC codes for your business and choose Articles of Association appropriate for your needs. Send an enquiry to info@landlordlab.co.uk.
You can register the Company yourself but mistakes can cause issues later, especially in relation to taxes and mortgage lending.
What information will be public?
One of the key considerations to consider is that some information in relation to a Limited Company in the UK is PUBLIC and can be found by anyone on the Companies House register.
- Name and address of Directors (TIP: you can register a business address if you don’t want your home address)
- Name, address and shareholdings of all Persons with Significant Control on the PSC register
If privacy is a big concern then discuss if this is the best option for you. At the time of writing there are further proposals from the Government in relation to open disclosure of profit and loss accounts for small companies which would make sensitive financial information public.
Ongoing Company Maintenance
Operating a BTL company isn’t “set and forget.” You’ll need to:
Annual Responsibilities:
- Confirmation Statement: Due once a year (£13 fee)
- Annual Accounts: Typically due 9 months after year-end
- Corporation Tax Return (CT600): Due 12 months after year-end, but tax payable within 9 months
Other Tasks:
- Maintain accurate and up to date bookkeeping
- Report any changes in directors, PSCs, or registered address
- Register for Corporation Tax (within 3 months of starting activity)
There are significant fines for late submissions and the Directors have a LEGAL duty to make filings. They can and have been prosecuted for not fulfilling their duties so this is not to be taken lightly.
Landlord Lab Finance can provide all of the above services as part of their service and ensure all filings are correct and made on time.
The impact of Making Tax Digital (from 2026)
The picture is changing on a weekly basis so this is what we know at the end of June 2025.
- Digital records – you will need specialist software to store your information digitally. Spreadsheet will no longer be allowed.
- Quarterly filings to HMRC – this will mirror VAT returns and means you will need to file FOUR times a year rather than just year end accounts.
- Full end of year submissions – this includes annual accounts and your final tax returns.
- Must use paid MTD compliant software – there will no longer be the option of using free HMRC online forms. These are being withdrawn.
These changes will make the role of a professional bookkeeper and accountant even more important in your business. They will have the correct software and expertise to ensure filings are correct and on time. You will need to do real time bookkeeping every quarter which is a big change for many landlords who only look at their books once a year at the moment. The Government has shown very little patience with rolling out fines in relation to MTD for VAT so we expect they will fine non-compliance heavily.
Is it the right choice for me?
Despite what you might read on the internet the answer is IT DEPENDS. If you are a higher rate taxpayer then it is more likely that making your next property purchase through a BTL is the right choice. The tax savings in relation to mortgage interest is the biggest swing factor for most in this position.
It is also likely to be the right choice for those who are looking to grow their business. A company wrapper if used correctly can allow you to deduct more expenses than a personal tax return as you scale. This is where a knowledgable property accountant can really add value.
The responsible advice that people should be giving is that you really should get advice before you incorporate. It is not something you can easily undo once the property is purchased.
Final Thoughts
There are many advantages to buying a BTL property through a Limited Company. However, it is easy to underestimate the responsibilities that you are taking on when you make this decision. So our final thought is to discuss it with a property accountant PRIOR to making the decision to make sure it actually achieves enough benefit to offset the increased costs and administration. Maintaining a Company is NOT a DIY job unless you are an experienced accountant. Not only can you miss something or make mistakes but you are also likely to miss opportunities for savings that an expert would see.