Landlord Accounting in Coventry: What Changed for Buy-to-Let in 2026

14 Sept

If you own rental property in Coventry, 2026 has brought some of the biggest changes to landlord tax in years. Between new digital reporting rules, a higher Stamp Duty surcharge on additional properties, and tighter Capital Gains Tax rules, keeping on top of your obligations is no longer a job for a spreadsheet and a shoebox of receipts.

At Cheylesmore, we work with landlords across Coventry and the wider West Midlands, from single buy-to-let owners to those building larger portfolios. Here's what's actually changed this year, and what it means for how you manage your rental accounts.

Making Tax Digital for Income Tax: The Big One

From 6 April 2026, Making Tax Digital (MTD) for Income Tax became mandatory for landlords with gross rental income over £50,000 a year. Instead of filing a single Self Assessment return in January, affected landlords must now:

Keep digital records of income and expenses using MTD-compatible software
Submit four quarterly updates to HMRC throughout the year
File a final year-end declaration to confirm the figures

The payment deadline itself hasn't moved — you'll still settle your tax bill by 31 January — but the reporting process has changed completely, and getting it wrong on a quarterly basis is a lot easier than getting it wrong once a year.

If your rental income sits below £50,000 today, don't relax just yet. The threshold drops to £30,000 from April 2027, and to £20,000 from April 2028. Most landlords in Coventry with more than one or two properties will eventually be brought into MTD, so it's worth setting up the right software now rather than scrambling later.

One thing worth knowing: if you own your properties through a limited company, MTD for Income Tax doesn't currently apply to you. This is one of several reasons more Coventry landlords are asking us about incorporating.

Higher Stamp Duty on Additional Properties

If you've bought — or are planning to buy — an additional residential property, you'll already have felt this one. The Stamp Duty Land Tax surcharge on additional dwellings rose from 3% to 5% in October 2024, and it remains in place through 2026. For anyone adding to a Coventry portfolio, this significantly increases the upfront cost of each new purchase and is worth factoring into your return calculations before you commit.

Capital Gains Tax on Selling Up

Thinking about selling a rental property? Gains on residential property are currently taxed at 18% or 24%, depending on which income tax band you fall into. You get a £3,000 annual exemption, and — this catches a lot of people out — a strict 60-day window from completion to report and pay any CGT due. Miss it, and you're looking at penalties on top of the tax itself.

Mortgage Interest: Still No Full Deduction for Individuals

This one isn't new for 2026, but it still trips up landlords who haven't reviewed their structure in a while. Since the Section 24 reforms fully phased in, individual landlords can no longer deduct mortgage interest as a business expense. Instead, you receive a 20% basic-rate tax credit on interest paid — which hits higher and additional-rate taxpayers hardest, since you're effectively only getting relief at the basic rate regardless of what band you're in.

This restriction doesn't apply to limited companies, which retain full interest deductibility against corporation tax. It's one of the main reasons landlord accountants in Coventry are having more "should I incorporate?" conversations than ever this year.

Personal Ownership vs Limited Company: Worth Revisiting

With MTD reporting obligations, mortgage interest restrictions, and rising Stamp Duty all pulling in the same direction, more landlords are asking whether a limited company structure makes sense. It isn't automatically more tax-efficient — it depends on your income level, how many properties you hold, whether you're reinvesting profits, and your long-term plans. But it's a conversation worth having with an accountant rather than deciding on a forum post.

What This Means for Coventry Landlords

Whether you own one flat near the city centre or a growing portfolio across Coventry and Warwickshire, the direction of travel is clear: more digital reporting, tighter deadlines, and less room for the "sort it out once a year" approach that's worked for landlords in the past.

At Cheylesmore, our Coventry accountants help landlords get ahead of these changes rather than reacting to them — setting up MTD-compatible software, reviewing whether personal or limited company ownership suits your situation, and making sure allowable expenses (repairs, letting agent fees, insurance, service charges, and more) are properly captured to keep your tax bill as low as it legitimately can be.

If you're unsure where your portfolio stands under the new rules, our team of accountants in Coventry can talk you through it. Get in touch to arrange a conversation about your rental property accounts.

This article is for general guidance only and doesn't constitute tax advice. Every landlord's situation is different — speak to one of our Coventry accountants for advice specific to your circumstances.