Answers for directors of property companies

Plain-English answers for the directors of a limited company that lets property, checked against GOV.UK. Each one says when it was last checked.

• What is an SPV property company, and what does it have to do each year?

  A property SPV (special purpose vehicle) is the everyday name for a limited company set up to own and let property, often with a mortgage. It is an ordinary private limited company in law, so each year its directors must prepare accounts, file them at Companies House, and send HMRC a Company Tax Return.

• When must a property company file its accounts at Companies House, and what if it’s late?

  A private limited company must file its annual accounts at Companies House within 9 months of the end of its financial year. Filing late brings an automatic penalty of £150 to £1,500 depending on how late, and failing to deliver acceptable accounts on time is also a criminal offence for the directors.

• What are the Corporation Tax deadlines for a property company?

  The Company Tax Return is due 12 months after the end of the accounting period it covers. The Corporation Tax itself is usually due 9 months and one day after the end of that period, so the payment falls due before the return does.

• Can a small property company use micro-entity accounts?

  GOV.UK says a company can prepare micro-entity accounts if it meets at least two of three limits: turnover of £1 million or less, £500,000 or less on its balance sheet, and 10 employees or fewer. Whether a company is within them depends on its own figures.

• Does a property company need an accountant to prepare its accounts?

  No. GOV.UK says companies do not have to use a professional accountant to prepare accounts. The directors are responsible for preparing them, the board must approve them, and a director must sign the balance sheet.

• Do companies have to file their accounts using software from 2028?

  Yes. GOV.UK says that from 1 April 2028 all companies must file their accounts using commercial software, in iXBRL format. Companies House’s web and paper services close for accounts filings on that date, whether the directors file or a professional does it for them.

• What Corporation Tax rate does a small property company pay?

  GOV.UK gives the Corporation Tax rate as 19% (the small profits rate) for profits of £50,000 or less, and 25% (the main rate) for profits above £250,000. Between £50,000 and £250,000 a company may be entitled to marginal relief. The limits are reduced for short accounting periods and for associated companies.

• What accounting records must a property company keep, and for how long?

  GOV.UK says a company must keep its accounting records for 6 years from the end of the last company financial year they relate to, and longer in some cases. They include everything it received and spent, what it owns and owes, and supporting documents such as invoices and bank statements.

• How is mortgage interest treated in a property company’s tax?

  HMRC’s Property Income Manual says that for a company, interest is deductible under the loan relationship regime, and that, unlike for income tax, interest is not an expense in computing the property business profits. So mortgage interest matters to a company’s tax, but it is dealt with through a different set of rules from the rental costs.

• Does a property company have to file a Company Tax Return if it made a loss?

  Yes. GOV.UK says you must still send a Company Tax Return if you make a loss or have no Corporation Tax to pay. A company must file the return if it receives a notice to deliver one from HMRC, and the return is due 12 months after the end of the accounting period.