A Cwmbran-based accountancy firm has advised that up to 20 per cent of all landlords will be negatively affected by the changes to interest relief.

Green and Co Accountants, based at Pembroke House off Llantarnam Park Way, claims that one in five landlords will be worse off when the changes are introduced over a three-year period from April 2017.

Director Ed Gooderham said: “George Osborne announced that landlords will no longer be able to deduct 100 per cent of their finance costs from their rental income to calculate assessable profit. Instead, they will be able to claim the finance costs as a basic rate reduction from their tax liability. This means that basic rate taxpayers will be potentially unaffected, but landlords who are taxed at the higher rate will be worse off.

"The changes will be brought in gradually which somewhat softens the blow, but a large portion of landlords will be worse off. From 6th April 2017 the changes will be introduced in a staggered manner, allowing a lower percentage of finance costs to be deducted from profit made.

"For the year 2017/2018, landlords may deduct 75 per cent of finance costs from taxable profit, 2018/2019 will see 50 per cent deductible, 2019/2020 25 per cent, with the full effect hitting landlords in the tax year 2020/2021."

Gooderham said: “The balance costs of each year can be claimed as basic rate relief. Any excess can be carried forward to the next tax year.”

Residential Landlord Association vice chairman and director for Wales, Douglas Haig, said: “In a time of significant dangers and threats, this is one of the single biggest negative changes in the Buy-to-Let market.

"It is important that landlords plan for these changes and take advice now.

"There are a lot of avoidance schemes being touted online that could leave landlords vulnerable to other complications, and it is important that they ensure the advice they get is from trusted sources that understand the legislation and solutions available to them.”