Client Story
How we sorted a Hatfield student-let landlord's tax for £5,800 saving
Client B owns a large house in Hatfield let to University of Hertfordshire students as an HMO. The property was personally owned and the Section 24 mortgage restriction was hitting hard, while the previous accountant had been treating it as a standard buy-to-let without capturing the additional HMO running costs.
We reviewed the HMO properly. We captured the additional allowable costs an HMO legitimately incurs — communal area cleaning, HMO licensing fees, additional safety certification, communal utilities, more frequent repairs and furniture replacement (via Replacement of Domestic Items relief) — and modelled whether incorporating would beat the Section 24 position given the borrowing.
Total outcome: annual tax saving of £5,800 through properly-captured HMO running costs and furniture relief, plus a clear model showing the breakeven point at which incorporating would become worthwhile.