Paragon warns landlords are not tax efficient

Paragon is urging buy-to-let investors to ensure they are fully tax efficient after research reveals many are failing to claim for the full range of tax allowances.

The lender says that landlords can offset many of the costs incurred through letting property against their income, but many are unaware of the full range of costs they can claim for.

Research by Paragon shows 13% of landlords are not claiming for mortgage interest, while a third do not claim management or letting agent fees, and 55% do not claim for advertising costs incurred in letting their property.

The firm has now launched a tax guide in association with Perrys Chartered Accountants to provide landlords with information on income tax, limited companies and Capital Gains Tax, as well as a list of tax reliefs and tax tips.

Nigel Terrington, chief executive at Paragon Group, says good tax planning is key to landlords’ overall performance.

He says: “Tax is a complex area and we are confident that our tax guide will help landlords obtain a better grasp of tax matters. It’s vital that landlords take advantage of the allowances open to them to maximise their return on investment.

“I’m sure when landlords take all of these costs into consideration it could generate a significant saving on their tax bill.”