Accounts, Section 24 and ownership advice for shared-house landlords in Brighton & Hove
Shared houses are common in Brighton and Hove, and the tax follows the same property income rules as any other let. The differences are in the costs: licences, bills included in the rent, heavier repairs and higher borrowing. Those same costs mean Section 24 bites earlier, so the choice between owning personally and through a company is worth modelling.
Property income goes on your Self Assessment return. If your gross self-employment and property income together exceed £50,000, Making Tax Digital for Income Tax applies from April 2026 and you send quarterly updates instead. See Making Tax Digital for landlords.
Mortgage interest is treated differently: it is not a deduction for an individual landlord, only a credit as above. Keep a spreadsheet or Xero ledger for each property, because HMRC expects expenses to be split when the same bill covers several properties.
For the same property, the company pays Corporation Tax on the profit after interest. On the example above, profit after £18,000 of interest is £52,000. Tax would be £10,030 after marginal relief, and taking profit out as dividends adds a second layer of tax. Whether that beats the personal result depends on how much you need to draw, so we model it before you commit.
Moving an existing HMO into a company can trigger Capital Gains Tax and Stamp Duty Land Tax, so the company route is usually cleaner for a property you are yet to buy. Our guides on landlords using a limited company and Section 24 set out the trade-offs.
If an HMO is owned jointly by a married couple or civil partners, rental profit is usually split 50:50 for tax unless you make a declaration to reflect unequal ownership. See our page on splitting rental income between spouses. Room rents are exempt from VAT, so you do not charge it and cannot reclaim it on related costs. Our VAT on rental property guide explains when that changes.
Sources: GOV.UK: Income Tax rates, GOV.UK: Corporation Tax rates and reliefs, GOV.UK: Making Tax Digital for Income Tax.
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Yes. The cost of a local authority HMO or landlord licence is normally an allowable expense against rental income, because it is a cost of running the let. It is deducted in the year it is paid, and no special allowance is needed.
Yes, if you own the HMO personally. Mortgage interest is not deducted from rental profit and gets a 20% tax credit instead, which costs higher-rate taxpayers more. A company does not face that restriction, although it has its own costs and extraction tax.
No. Letting residential accommodation is exempt from VAT, so you do not charge it on rent, but you also cannot reclaim VAT on costs relating to those lets. Holiday accommodation is different and is standard-rated.
Yes. If you pay gas, electricity, water, broadband and council tax for the house and include them in the rent, those costs are allowable against the rental income. Keep the statements, because bills held in several names are a common source of HMRC queries.