A GUIDE TO SMALL BUSINESS PROPERTY TAX
August 23rd, 2017.


Small businesses who own a property need to carefully consider a new round of tax changes which might affect their business, as Tricia Halliday, tax director at chartered accountants, Martin Aitken & Co Limited, explains. 


There have been a number of changes introduced recently, which provide another reminder that the tax benefits from property investments will not be as good in coming years.

One of the key attractions of investing in property, as opposed to other assets, is that the interest on borrowings to buy property is tax-deductible against the income generated. However, from April 2017 this became restricted.

The outcome of this will be most keenly felt by some landlords who may well find they will move from being a basic rate tax payer to a higher rate tax payer.

Over the next four years, for individual investors, HMRC will phase in a reduction in the rate of tax relief on interest to basic rate. For higher and additional rate taxpayers this could significantly increase their tax bill on buy-to-let investments – currently interest often offsets a large part of the rental income.


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