Private landlords are being warned not to sleep-walk into new tax rules and to lobby their MPs.

Separately, Jackie Hall, a partner at tax and accountancy firm RSM UK, said that while existing buy-to-let rules are complex, it is about to become even tougher once mortgage interest relief is scaled back from April.

Landlords were already hit by the end of the wear and tear allowance and missed out on capital gains tax cuts last year while being hit with extra Stamp Duty, but Hall says the incoming changes are more significant.

Explaining the new rules, she said the current legislation allows interest relief at the marginal rate of tax, giving individuals relief at up to 45%. This relief is soon to be replaced by a tax credit at the basic rate of tax, currently 20%.

She said: “In some cases landlords may find that although they are making a loss after interest charges they are still left with a charge to income tax because of this restriction.

“The resulting higher level of taxable income may also have a knock-on effect on an individual’s personal allowance, high-income child benefit charge and entitlement to child tax credit.

“The new rules will be phased in over a four-year period and between now and then individuals could see a huge increase in their tax bills as a result. If in that time we also see an increase in interest rates, residential landlords will suffer a double hit and the ongoing impact on the housing market could be significant.

“Residential landlords need to consider exactly how these changes will affect them. It may well be that the way in which landlords structure their property businesses will need to change in order to ensure commerciality in the longer term.

“Moving properties into corporate ownership may be option for some, but that is not without difficulties. All the more important then to plan ahead to understand the overall impact and the options available.”

It comes as MPs and campaigners still seem to be holding out hopes of a reversal in the policy.

One commentator on an external forum has suggested replacing it with 2% levy on all rental revenue.

Meanwhile, an MP who was formerly a special adviser to housing ministers between 1992 and 1995 has called for landlords to get in touch with their MPs so they can fight on their behalf against the changes.

Writing for the Residential Landlords Association newsletter, James Gray, Conservatieve MP for North Wiltshire, said: “Nothing focuses the mind of a Minister more than lots of MPs, particularly from their own Party, telling them the Government has made, as it has here, a big mistake and that changes are needed.

“Landlords themselves therefore have a crucial role to play in seeking the changes to recent tax reforms that the market needs.

“We need you to email or write to your MP or, preferably, go to see him or her at one of their regular surgeries.”