Writing in Property118, Eamon Shahir, Founder Taxd asks the question, Can UK Landlords survive the ongoing tax raid?

The article can be seen here, and says that UK landlords have been hit with tax increases since 2021, when full mortgage interest relief was scrapped. The result: landlords now keep less of their profits while also grappling with higher running and maintenance costs.

Now, Chancellor Rachel Reeves is reportedly eyeing landlords as a way to plug holes in the public finances. Keir Starmer has also said that landlords don’t fall under his definition of “working people” – suggesting they could be singled out for further taxation.

What could change?

According to reports in the Telegraph, possible measures under discussion include:

• National Insurance on rental income – currently, rental income is treated as investment income and exempt. Workers pay 9% NICs on earnings up to £50,000 and 2% above this. If landlords were brought in, basic-rate taxpayers would see their margins squeezed, while higher-rate landlords could be pushed to exit the sector. Overseas landlords may also be caught, despite not having NI numbers.

• New income tax bands for landlords – technically possible, but unlikely due to the sheer administrative burden it would create.

• VAT on lettings – at present, VAT would only apply above the £90,000 threshold, so few landlords would be affected. But if the threshold were lowered, the 20% cost would almost certainly be passed on to tenants through higher rents.

Whatever the government decides, the financial hit will fall on landlords first – but the ripple effect will reach tenants through rent increases and reduced rental supply.

Reducing the tax bill

Landlords do still have ways to manage their liability:

• Claim running costs – Repairs, service charges, accountancy fees, insurance, travel, and services such as cleaners and gardeners can all be deducted if incurred wholly and exclusively for the rental business.

• Capital Gains Tax reliefs – Renovations and improvements (e.g. a new kitchen), legal and estate agent fees, and Stamp Duty can be offset. Where relevant, Private Residence Relief can also reduce the bill.

• Limited companies – Buying property through a company means paying corporation tax (19–25%) instead of income tax at up to 45%. Mortgage interest is also fully deductible in this structure.

• Professional advice – Independent tax advice can help landlords optimise their portfolios and plan ahead, particularly around inheritance.

• Cheaper accountancy options – Some landlords are paying high fees for limited company accounts; more cost-effective alternatives exist.

Digital reporting on the way

More change is already scheduled. From April 2026, landlords with income above £50,000 will have to submit quarterly digital updates to HMRC under Making Tax Digital. From 2027, the threshold drops to £30,000.

Getting to grips with digital accounting software early will help landlords avoid disruption when the rules take effect.

📌 Immediate actions for landlords

• 🔎 Audit your expenses – make sure you’re claiming every allowable cost.

• 🏢 Review ownership structure – higher-rate taxpayers should consider whether a limited company is more tax-efficient.

• 💻 Plan for Making Tax Digital – test accounting software now, ahead of 2026/27 deadlines.

• 📊 Stress test your portfolio – model how potential NIC or VAT changes would affect profits and cashflow.