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Record Numbers Of Tax Savvy Landlords Morph Into BTL Companies

Record Numbers Of Tax Savvy Landlords Morph Into BTL Companies

Companies House figures show record numbers of landlords have opted to form companies’ holding their properties.During 2021 47,400 new BTL companies were set up across the UK which was twice as many as formed in 2017 despite the start of mortgage tax interest relief phased reductions.
The tax incentive for landlords to become limited entities is because companies are taxed on profits not just turnover, so clearly a massive ‘encouragement’ for those with a number of properties to ‘switch’ their tax status.
The rate of new BTL companies being formed in 2021 plummeted by more than a half from 2020’s 30 percent down to 14 per cent in 2021.
The number of UK BTL companies passed the 200,000 mark when the first lockdown ended and by the end of 2021 there were 269,000 limited BTL companies.

Interestingly approximately 61 per cent of the companies were formed since the beginning of the mortgage interest tax relief ‘phased’ reductions in April 2017.
On average BTL companies have been in business for 9.2 years which has dropped since the increase over the last five years.
Three per cent of BTL companies - 7,900 - have been in business for more than 50 years and 440 have been around for more than one hundred years.
BTL companies have 583,000 mortgaged properties which is around 29 per cent of all UK BTL mortgages and is an increase of 3 per cent in the last year.
Last year the major take up of BTL companies were in London and the South East which accounted for 45 per cent of all such companies.
Although numbers of BTL companies is continually increasing 25,100 were shut down from the beginning of Covid.
While the number of buy to let incorporations has continued to grow, around 25,100 have closed their doors since the onset of the pandemic.

Around 15,200 BTL companies were closed in 2021 – 6 per cent of all UK BTL businesses.

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