Back
Let us sort your Self Assessment today. Stress-free. For £119, all in. Learn more

Mortgage interest restriction

The mortgage interest restriction is a restriction on the tax relief that landlords can claim for their finance costs.

In short, until the 2016/2017 tax year, you could claim all of the mortgage interest against your rental income tax. If you had an interest-only buy-to-let mortgage, this was obviously a great benefit.

Since then it has been gradually replaced with a 20% tax credit, and starting on April 6 2020, you’ll only be able to use this tax credit. In other words, claiming mortgage interest is restricted to the basic rate of tax (20%).

The mortgage interest restriction only affects you if you’re a higher rate taxpayer because you used to be able to get back 40% or more of your mortgage interest. If you have many properties, it might be worthwhile to run your rental business through a limited company, since you can still claim the interest in the old way.

If you’re a basic rate taxpayer, nothing has changed – you were already getting back 20% of the mortgage interest.

More guides & useful information

Let us sort your Self Assessment online. £119, all in.

That’s right. No matter how complicated it gets or why you need to do a return in the first place, it’ll cost £119 to get it done. That includes VAT, last-minute changes and all the support you may need.

How it works

1. Answer a few simple questions

And we mean a few. After a couple of minutes of answering questions online we’ll have everything we need to start working on your tax return.

2. Then get paired with a tax accountant

That’s right, you’ll be matched with a real accountant who is best suited to prepare your return. Plus, they’re on hand for questions whenever you need.

3. We file your Self Assessment for you

Once you’ve signed off your return, your TaxScouts accountant will file your return online with HMRC. That’s it! We told you it was simple.