Accounting News – Summer 2025

Property Income & Corporation Tax: What Landlords and Limited Companies Should Know

This quarter we focus on two things many clients ask about: rental property income (accounting & tax) and corporation tax planning. At A4 Accounting we can help ensure your year-end figures, tax payable, and reporting are all in order.

Rental Property Income: Recent Changes & Key Considerations

• Keeping separate records: Ensure that property income and expenses are clearly separated from your business or other income. Bookkeeping should capture rent received, maintenance, repairs, insurance, management fees, council tax and utilities (if your arrangement means you cover them).
• Allowable expenses: Repairs vs improvements – only repairs are allowable against rental income, not improvements. Also make sure you record periods when property is empty (you cannot claim expenses when no income).
• Furnished Holiday Lettings rules: If your property qualifies, different rules apply; check with us to see whether yours does.
• Interest and finance costs: Changes over recent years (e.g. restriction on how much interest you can deduct) mean you must carefully track finance cost allocations.

Corporation Tax: Staying Ahead in 2025

• Profit thresholds: As in Q1, knowing which profits band you fall into (under £50,000, between £50,000-250,000, over £250,000) matters a lot. Marginal relief applies for middle band. GOV.UK
• Capital allowances / investment deductions: If you invest in plant & machinery or business assets, ensure you claim allowances – this reduces your taxable profit. Keep purchase records, invoice dates, installation dates etc.
• Electronic invoicing & tax admin: There has been a consultation published in early 2025 on mandatory electronic invoicing in the UK. While not yet law, this signals where HMRC is heading. Good invoice management, proper records, and adopting systems now can ease transition. PwC Tax Summaries

How Monthly Management Accounts Help Landlords & Companies

• Visibility of profit trends (for both rental and trading income), enabling tax planning during the year.
• Identifying tax deficits early: If your rental property or business is making a loss or low profit, seeing this monthly helps you decide whether to invest more, reduce costs, or plan for making up lost income.
• Managing cashflow for tax payments: Corporation tax, property income tax, and duties often arise at fixed periods – but income and costs fluctuate. Monthly accounts let you smooth out the ups and downs.
• Accurate year-end accounts: Filing accounts for your company – whether you are limited, sole trader, in a partnership or rental business – it is much easier if monthly ledgers are clean, reconciled, and reviewed regularly.

Recent News Item Highlight

• Business Rates Reform & Support for Growth: As noted, the government’s interim report on business rates includes reviewing the penalties small businesses face when expanding into second premises (losing Small Business Rates Relief), and looking at more stable and fairer multipliers. If your rental or business premises are affected, this could influence your property costs and business decisions. Scottish Local Retailer Magazine+1

If you own rental property, run a company (limited or otherwise), or both, A4 Accounting can help you set up or improve your monthly management accounts so your property income and corporation tax figures are clear, compliant, and efficient. Let’s review your property and business records and make sure your year-end tax accounts are correctly prepared.