Quick Answer
Before the tax year ends on 5 April 2027, commercial property owners should review eight things: rental income timing, capital allowances, repairs versus improvements, capital gains on planned sales, business rates, VAT and the option to tax, Making Tax Digital readiness, and service charge accounts. This year matters more than most. The Autumn Budget on 28 October 2026 confirmed that income tax on property income rises to 24%, 44% and 49% from 6 April 2027. The main capital allowances writing-down rate also drops from 14% to 12% from April 2027, while the first-year allowance rises from 40% to 50% for spending from 1 January 2027. The £3,000 capital gains allowance is use it or lose it, and the Business Asset Disposal Relief lifetime limit halves to £500,000 from 6 April 2027. Acting before year-end, with your accountant and your property adviser in the same conversation, is how owners keep more of their return.
Why This Year-End Is Different
Most commercial landlords think about tax twice a year: once when the accountant asks for receipts, and again when the bill lands.
That approach has always cost money. This year, it could cost quite a lot more.
Chancellor John Healey delivered the Autumn Budget on 28 October 2026. For property owners, the headline was simple: rental profit is getting more expensive to earn. From 6 April 2027, income tax on property income rises to 24% at basic rate, 44% at higher rate and 49% at additional rate in England. That is two points on top of the rise already announced in 2025, so rental income will be taxed four points above wages.
Capital allowances are shifting too. Some reliefs get bigger, some get smaller, and the dates they change are different. Get the timing right and you keep more. Get it wrong and the relief simply drips through more slowly.
Think of it like filling up the car before a fuel price rise you already know is coming. You are not avoiding fuel. You are just being sensible about when you buy it.
At Rory Mack Associates, we have been advising commercial owners across Stoke-on-Trent and Staffordshire since 1992. We are not accountants, and we always recommend you take formal tax advice. What we do see, every single year, is owners losing money because the property side and the tax side never talked to each other. This guide is designed to fix that.
Note: this article reflects the position following the Autumn Budget of 28 October 2026. Some measures still need to pass through Finance Bill 2026-27, so check the final detail with your accountant before acting.
Which Year-End Are We Talking About?
Here is where people get tripped up. “Year-end” means different things depending on how you own your property.
If you own personally or in a partnership
Your tax year ends on 5 April. That is the date that matters for income tax and capital gains tax. Your Self Assessment return for 2025/26 is due by 31 January 2027, along with any balancing payment.
If you own through a limited company
Your company’s year-end is its own accounting date. That might be 31 March, 31 December or something else entirely. Corporation tax works off that date, not 5 April.
The dates worth putting in the diary
| Date | What happens |
| 1 January 2027 | Main rate first-year allowance rises from 40% to 50% for qualifying spending |
| 31 January 2027 | Self Assessment deadline for 2025/26 |
| 31 March 2027 | Last day before the writing-down allowance falls for companies |
| 5 April 2027 | End of the 2026/27 tax year for individuals |
| 6 April 2027 | Property income tax rates rise to 24%, 44% and 49%; BADR lifetime limit halves to £500,000; Making Tax Digital widens to £30,000+ |
If you own a mix, perhaps a unit in your own name and a portfolio in a company, you have two year-ends to plan around. That is completely normal. It just means a little more joined-up thinking.
8 Things Commercial Property Owners Should Review Now
1. Your rental income and the 2027 rate rise
If you hold commercial property in your own name, every pound of rental profit earned after 5 April 2027 will be taxed more heavily. A higher-rate landlord goes from 40% today to 44% from April 2027.
So the question becomes: what can sensibly fall into the cheaper year?
- Rent reviews and lease renewals. If a review is due, check whether the timing of any backdated uplift affects which tax year it lands in. Our team handles rent reviews and lease renewals across Staffordshire.
- Arrears. Rent owed but unpaid can sometimes be treated differently from rent collected. A tidy arrears ledger makes this conversation with your accountant far easier.
- Ownership structure. The gap between personal and company tax is widening for landlords. That does not mean everyone should incorporate. Transferring property into a company can trigger stamp duty land tax and capital gains tax. It is, however, worth a proper review this year.
A quick word of caution. Shifting income around purely to beat a rate change can backfire if HMRC sees no commercial reason for it. Good planning follows real business decisions, not the other way round.
2. Capital allowances: the timing puzzle
This is the area where commercial owners most often leave money on the table.
Capital allowances let you claim tax relief on qualifying plant and machinery. In a commercial building, that includes far more than people expect: heating, air conditioning, lifts, electrical systems, lighting, sanitary fittings and fire alarms. Many of these count as “integral features” and are hidden inside the walls.
The Budget pulled two levers in opposite directions:
- The main rate first-year allowance rises from 40% to 50% for qualifying spending on or after 1 January 2027.
- The main rate writing-down allowance falls from 14% to 12% from 1 April 2027 for companies and 6 April 2027 for individuals.
- The special rate pool (where most integral features sit) stays at 6%.
The Annual Investment Allowance of £1 million is still available too, and companies can still claim full expensing on qualifying new plant and machinery.
In plain English? More relief up front, less in later years. If you are planning a new boiler, an LED lighting upgrade or new air handling, the date the spending is incurred could change how quickly you get the relief back. Your accountant will know which allowance suits your situation, but they can only advise on what they know is coming.
Buying or recently bought a building? Check whether the seller pooled the fixtures and whether a joint election was made at completion. If not, you may have lost the right to claim. This is one of the costly slip-ups we cover in our guide to common commercial property mistakes.
3. Repairs versus improvements
Here is a distinction that saves landlords real money.
A repair restores something to how it was. It is usually a revenue expense, deducted straight from your rental profit. An improvement makes something better than it was. It is usually capital, so it is either claimed through capital allowances or added to the cost of the building for capital gains.
Picture a leaking flat roof on a unit in Hanley. Patching it with like-for-like materials is a repair. Replacing it with a new, insulated pitched roof is likely to be an improvement.
Why does timing matter now? Because a repair deducted against income taxed at 40% this year saves less than the same repair deducted against income taxed at 44% next year. On the other hand, deferring urgent repairs is rarely a good idea. Water ingress does not wait for the tax year. Our autumn maintenance checklist is a useful place to start.
If you have a lease ending, the same thinking applies to dilapidations. Any settlement a tenant pays you, and how you spend it, has tax consequences worth understanding before the money changes hands.
4. Capital gains on a planned sale
Thinking of selling in the next 12 months? Then the year-end matters a great deal.
For 2026/27, individuals pay capital gains tax on commercial property at 18% within the basic rate band and 24% above it. The Budget left these rates unchanged. The annual exempt amount stays at £3,000 per person. It cannot be carried forward, so if it is not used by 5 April, it is gone.
Three things to check:
- The date of disposal. For capital gains tax, this is normally the date contracts are exchanged, not the completion date. Exchanging on 4 April or 7 April puts the gain in a different tax year.
- Business Asset Disposal Relief. If you own the premises your trading business operates from, and you sell them alongside the business, you may qualify for the 18% BADR rate. The lifetime limit drops from £1 million to £500,000 for disposals from 6 April 2027. If a sale is already in the pipeline, completing before then could matter.
- Losses and costs. Have you kept records of improvement costs, legal fees and agents’ fees? All of these can reduce the taxable gain. Losses on other assets can be set against gains too.
You will also need a defensible market value, particularly for gifts, transfers between family members or the 31 March 1982 rebasing. We provide RICS capital gains tax valuations for exactly this reason. For timing the sale itself, read when is the best time to sell a commercial property.
5. Business rates after the 2026 revaluation
Business rates are not an income tax, but they are a real cost, and they changed significantly in April 2026.
The 2026 revaluation updated every rateable value in England, based on rental values at 1 April 2024. At the same time, England moved from two multipliers to five:
| Property type | Rateable value | Multiplier (2026/27) |
| Small business, retail, hospitality and leisure | Under £51,000 | 38.2p |
| Small business, other sectors | Under £51,000 | 43.2p |
| Standard, retail, hospitality and leisure | £51,000 to £499,999 | 43.0p |
| Standard, other sectors | £51,000 to £499,999 | 48.0p |
| High-value property, all sectors | £500,000 and above | 50.8p |
The old 40% Retail, Hospitality and Leisure Relief has ended and been replaced by the lower multipliers above. In the Autumn Budget, the Chancellor also announced that the small business threshold at which occupiers pay no rates will rise from £12,000 to £18,000 from April 2027.
What to review before year-end:
- Is your new rateable value accurate? Errors are more common than you would think.
- Is your property on the right multiplier for its actual use?
- If a unit is empty, are you claiming the empty property relief you are entitled to?
- Are your tenants aware of what they are being billed, and is it reflected in your service charge or lease terms?
Our business rates service covers checks, challenges and appeals with the Valuation Office Agency. For the basics, see understanding business rates.
6. VAT and the option to tax
Most commercial lettings are exempt from VAT by default. Many owners opt to tax so they can recover VAT on costs, which then means charging VAT on rent.
Before year-end, dig out the paperwork. Has the option been properly notified to HMRC? Does it cover the right building? Have you made any changes, like a part residential conversion, that affect it?
Once made, an option to tax generally lasts 20 years. It also affects a future sale, including whether it can be treated as a transfer of a going concern. Missing paperwork is a headache to sort out mid-transaction, and a far smaller one to sort out now.
7. Making Tax Digital readiness
Since April 2026, individual landlords and sole traders with combined qualifying income over £50,000 have had to keep digital records and send quarterly updates to HMRC. From April 2027, that threshold drops to £30,000.
If you are about to cross that line, now is the time to choose software and get your records in shape. Messy records do not just cause compliance headaches. They hide allowable expenses that would otherwise reduce your bill.
This is one area where professional property management pays for itself. Clean monthly statements, categorised costs and digital invoices make quarterly reporting far less painful.
8. Service charges and block accounts
If you own a multi-let building or a residential block, the service charge accounts have their own year-end rhythm.
Check that reserve or sinking fund contributions are held correctly, usually in trust, and are not muddled with your own income. Make sure recoverable costs have actually been recovered. Unrecovered service charge costs quietly eat into your net income and your valuation.
Good block management keeps all of this separate, transparent and audit-ready. We explain the wider benefits in how effective block management can improve your property investment.
A Real-World Example: One Staffordshire Landlord, Three Decisions
Let’s make this practical. Meet Sarah. She is a fictional owner, but her situation is one we see often.
Sarah owns two light industrial units in Longton in her own name, plus an older retail unit in Burslem. She is a higher-rate taxpayer. Her rental profit is around £50,000 a year.
- Decision one: the heating system. One unit needs a new heating and ventilation system costing £30,000. She checks with her accountant whether her Annual Investment Allowance covers it in full this year, or whether timing the spend after 1 January 2027 changes anything. Either way, she now knows the spend is plant, not a building cost, so it attracts relief rather than sitting unused.
- Decision two: the Burslem sale. She has a buyer lined up for the retail unit. Because the gain will be taxed in the year contracts are exchanged, she and her accountant compare exchanging before or after 5 April. She also uses her £3,000 annual exemption, which would otherwise be lost.
- Decision three: the bigger picture. From April 2027, roughly £30,000 of her rental profit will be taxed at 44% instead of 40%. That is around £1,200 a year extra, every year, before any growth in rent. It is enough to justify a proper conversation about how her property is held in the long term.
None of those decisions took long. All three needed someone to ask the question before 5 April, not after.
Your Commercial Property Year-End Checklist
Print it, forward it to your accountant, or tick it off over a coffee.
- Confirm your year-end date (5 April for individuals, your company’s accounting date otherwise)
- Estimate this year’s rental profit and next year’s at the new rates
- List any planned plant, equipment or fit-out spending and when it will be incurred
- Check capital allowances claims on any building bought in the last two years
- Separate repairs from improvements in this year’s costs
- Review any sale or transfer planned in the next 12 months, and the exchange date
- Use your £3,000 capital gains annual exemption if you have gains to realise
- Check your 2026 rateable value and multiplier
- Find your option to tax paperwork
- Confirm whether Making Tax Digital applies to you from April 2027
- Reconcile service charge accounts and reserve funds
- Get a current market valuation if a sale, gift or restructure is on the cards
Want a wider view of ongoing costs? Our guide to the hidden costs of commercial property ownership is a good companion to this list.
How Rory Mack Associates Helps
We are not your accountant, and we will never pretend to be. What we bring is the property half of the conversation.
Your accountant can tell you the tax effect of a sale. We can tell you what the building is actually worth, how long it might take to sell, and whether a lease event will change the price. Your accountant can claim capital allowances. Our property management team can make sure the invoices and records exist to support the claim.
In practice, our clients use us for:
- RICS valuations for capital gains tax, transfers, probate and lending, through our commercial valuations service
- Business rates checks, challenges and appeals
- Rent reviews and lease renewals timed with your wider plans
- Property and block management that keeps records clean, digital and ready for Making Tax Digital
- Sales and lettings through our commercial estate agency team, when the review points to selling
Most of our clients come to us because they want the hard work taken off their plate. Year-end planning is a perfect example. You make the decisions. We handle the legwork.
Summary
The 2026/27 year-end is a turning point for commercial property owners. Property income tax rises from April 2027, capital allowances change shape, and the Business Asset Disposal Relief limit halves. None of that is a reason to panic. It is a reason to review.
Start with the eight areas above, use the checklist, and get your accountant and your property adviser around the same table before 5 April. If you own commercial property in Stoke-on-Trent, Newcastle-under-Lyme or anywhere in Staffordshire, get in touch with Rory Mack Associates on 01782 715725. We have been helping local owners make better property decisions since 1992.
This article is general guidance and not tax advice. Always speak to a qualified accountant or tax adviser before acting.
Frequently Asked Questions
When is the deadline for commercial property tax planning in the UK?
For individuals and partnerships, the key date is 5 April, the end of the tax year. For companies, it is the company’s own accounting year-end. Most planning needs to happen before those dates, because many reliefs and allowances cannot be applied after the year has closed.
How much tax will landlords pay on commercial rental income from April 2027?
From 6 April 2027, individuals in England will pay income tax on property income at 24% (basic rate), 44% (higher rate) and 49% (additional rate). Companies continue to pay corporation tax on rental profits instead.
Can I claim capital allowances on a commercial building I already own?
Often, yes. Many owners have never claimed for qualifying fixtures such as heating, lighting, lifts and electrical systems. The rules are stricter if you bought the building from someone who had already claimed, so check whether the fixtures were pooled and an election was made at purchase.
Does selling commercial property before 5 April reduce capital gains tax?
It can affect which year the gain falls in and whether you can use that year’s £3,000 annual exemption. The disposal date is usually the exchange of contracts, not completion. If Business Asset Disposal Relief applies, selling before 6 April 2027 keeps access to the current £1 million lifetime limit.
Do I need a valuation for commercial property tax purposes?
You usually do if you are gifting property, transferring it between family members or into a company, dealing with an estate, or calculating a gain from a historic value. HMRC expects a properly supported market value, and an RICS valuation gives you a defensible figure if the numbers are ever questioned.
