CT600 for Buy-to-Let Companies: Complete Guide

Running your buy-to-let properties through a limited company? This guide covers everything you need to know about filing your CT600 Corporation Tax return.

Why Buy-to-Let Through a Company?

Many landlords have incorporated due to:

Full mortgage interest relief - 100% deductible (unlike personal ownership)
Lower tax rates - Corporation Tax at 19-25% vs up to 45% Income Tax
Retained profits - Keep profits in company at lower rates
Succession planning - Easier to pass on shares

Buy-to-Let Tax Basics

As a property company, you pay Corporation Tax on rental profits:

Profit Level	Tax Rate
Up to £50,000	19%
£50,001 - £250,000	25% (with marginal relief)
Over £250,000	25%

Property income is reported in Box 190 (not Box 165 which is for trading).

Key CT600 Boxes for Landlords

Box	Description	What Goes Here
190	Property business income	Net rental profit
300	Net property income	After adjustments
410	Profits chargeable	Total taxable profits
440	Corporation Tax	Tax due

Calculating Your Rental Profit

Step 1: Total Rental Income

Add all rental income:

``` Property 1: 12 months @ £1,200/month £14,400 Property 2: 12 months @ £950/month £11,400 Property 3: 10 months @ £1,100/month £11,000 Total rental income £36,800 ```

Step 2: Deduct Allowable Expenses

``` Rental income £36,800

Expenses: Mortgage interest (£12,000) Letting agent fees (10%) (£3,680) Insurance (£1,200) Repairs and maintenance (£2,500) Ground rent and service charges (£1,800) Accountancy fees (£1,000) Other expenses (£800)

Net rental profit £13,820 ← Box 190 ```

Mortgage Interest - The Key Advantage

For companies, mortgage interest is fully deductible:

``` Rental income £36,800 Mortgage interest (£12,000) Other expenses (£9,980) Taxable profit £14,820 ```

Compare to personal ownership:

Section 24 restricts personal landlords to basic rate relief only
Company landlords deduct 100% as a business expense

This is why many landlords incorporated.

Allowable Expenses

Fully Deductible

Finance costs:

Mortgage interest (fully)
Loan interest
Mortgage arrangement fees (spread over loan term)
Bank charges

Property costs:

Letting agent fees
Property management
Buildings insurance
Ground rent
Service charges
Council tax (if landlord pays)

Maintenance:

Repairs (like-for-like)
Decorating
Garden maintenance
Cleaning between tenants

Professional:

Accountancy
Legal fees (for tenancies)
Safety certificates
Inventory costs

Not Deductible (Capital)

Property purchase price
Stamp duty (part of cost)
Property improvements (new bathroom, extension)
Furniture for unfurnished letting

Capital items may qualify for Structures and Buildings Allowance (SBA) instead.

Repairs vs Improvements

This distinction is crucial:

Repairs (Deductible)	Improvements (Not Deductible)
Fixing a boiler	Installing a new boiler (upgrade)
Repainting	Adding a conservatory
Replacing broken window	Installing double glazing
Like-for-like flooring	First-time carpeting

The test: Are you restoring to original condition or making something better?

Example CT600 for BTL Company

Property Holdings Ltd - 3 Buy-to-Let Properties

Year ended 31 March 2025

Income	Amount
Property 1 rent	£18,000
Property 2 rent	£14,400
Property 3 rent	£13,200
Total rent	£45,600

Expenses	Amount
Mortgage interest	£15,000
Agent fees	£4,560
Insurance	£1,500
Repairs	£3,200
Ground rent	£750
Service charges	£1,200
Safety certificates	£400
Accountancy	£1,000
Other	£500
Total expenses	£28,110

Net property profit: £17,490

CT600 entries:

Box 190: £17,490
Box 410: £17,490
Tax at 19%: £3,323

Void Periods

Empty property periods are normal for landlords:

Expenses during voids are still deductible
Council tax during voids is deductible
Marketing costs to find tenants are deductible
No rental income to declare

``` Property 2: Void for 2 months Rent received: 10 × £950 = £9,500 Council tax during void: £280 (deductible) Agent re-letting fee: £475 (deductible) ```

Multiple Properties

All properties form one "property business":

``` Property 1: £8,000 profit Property 2: £5,000 profit Property 3: (£2,000) loss Net property profit: £11,000 ← Box 190 ```

Profits and losses are pooled automatically.

Property Losses

If expenses exceed income:

``` Total rent £30,000 Mortgage interest (£25,000) Other expenses (£10,000) Property loss (£5,000) ```

Property losses:

Carry forward against future property profits
Cannot offset against other income (generally)
Reported separately from trading losses

Corporation Tax Rates Worked Example

Scenario: £100,000 rental profit

Using 2024/25 rates:

``` Upper limit: £250,000 Lower limit: £50,000 Profit: £100,000

Main rate tax: £100,000 × 25% = £25,000 Marginal relief: £3,750 Tax payable: £21,250

Effective rate: 21.25% ```

This is still better than personal higher rate (40-45%) plus restricted mortgage relief.

Director's Salary and Dividends

How to extract profits:

Option 1: Salary

Deductible expense for company
Subject to Income Tax and NIC
Often set below NIC threshold (~£12,570)

Option 2: Dividends

Paid from post-tax profits
Lower tax rates than salary
£500 dividend allowance (2024/25)

Most BTL company directors take:

Small salary (up to NIC threshold)
Dividends for remaining income needs

Record Keeping

Essential records for BTL companies:

Tenancy agreements - All current leases
Rent records - What's due vs received
Mortgage statements - Interest amounts
Expense receipts - All deductible costs
Safety certificates - Gas, electrical, EPC
Insurance documents - Landlord policies
Agent statements - Fees and rent collected

Keep for at least 6 years.

Common Mistakes

1. Using Trading Boxes

Wrong: Putting rental income in Box 165 Right: Rental income goes in Box 190

2. Missing Mortgage Interest

Wrong: Forgetting to claim mortgage interest Right: Claim 100% of interest (company benefit)

3. Claiming Improvements as Repairs

Wrong: Deducting a new extension cost Right: Only like-for-like repairs are deductible

4. Wrong Accounting Date

Wrong: Using calendar year when YE is March Right: Match income and expenses to accounting period

When Using TinyTax

TinyTax handles property companies by:

Putting rental income in correct boxes
Separating property from trading income
Calculating property profit correctly
Handling multiple properties

Need Help?

Buy-to-let companies have specific tax advantages. TinyTax guides you through the CT600 process, ensuring your property income is correctly reported.

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