Claiming the right expenses is one of the most effective ways to reduce your rental income tax bill. Yet many landlords either overclaim (which HMRC penalises) or underclaim (which costs them money they are legally entitled to keep).
This guide covers every main category of allowable expense for UK landlords, explains the rules around repairs versus improvements, and clarifies what you cannot claim.
The Golden Rule: Wholly and Exclusively
HMRC only allows expenses that are incurred wholly and exclusively for the purpose of renting out the property. If an expense has any personal element, you can only claim the business proportion.
For example, if you use your personal vehicle partly for rental property visits and partly for personal use, you can only claim the proportion of costs related to property-related journeys.
Allowable Expenses for UK Landlords
1. Letting Agent and Management Fees
If you use a letting agent to find tenants, manage the property, or collect rent, their fees are fully deductible. This includes finder fees, ongoing management fees, and renewal fees.
2. Landlord Insurance
Premiums for buildings insurance, contents insurance, and specialist landlord insurance policies are allowable expenses. Include rent guarantee insurance and legal expenses cover if you hold these.
3. Repairs and Maintenance
The cost of repairing or maintaining the property to keep it in its original condition is deductible. This includes:
- Fixing a broken boiler or heating system
- Repairing a leaking roof
- Repainting and decorating between tenancies
- Plumbing and electrical repairs
- Replacing broken fixtures on a like-for-like basis
| Repairs vs improvements: the key distinction HMRC distinguishes between repairs (allowable) and improvements (not allowable). Replacing a single-glazed window with a double-glazed unit is an improvement, not a repair, because you are upgrading the property beyond its original condition. Replacing a broken double-glazed unit with an identical unit is a repair. Getting this wrong is one of the most common landlord tax errors. |
4. Utility Bills and Council Tax
If you pay utility bills or council tax on behalf of your tenants, these are deductible expenses. If the tenant pays these directly, you cannot claim them.
5. Accountancy and Legal Fees
Fees paid to an accountant for preparing rental accounts or Self Assessment returns are fully deductible. Legal fees for renewing a short-term tenancy agreement (under one year) are also allowable. However, legal fees for the original grant of a lease are not deductible as a revenue expense.
6. Advertising Costs
The cost of advertising your property to find tenants is deductible. This includes online listing fees, newspaper advertising, and signage costs.
7. Ground Rent and Service Charges
If you own a leasehold property, ground rent and service charges paid to the freeholder are allowable expenses.
8. Mortgage Interest (Subject to Section 24)
Individual landlords cannot deduct mortgage interest as a direct expense under Section 24 rules. Instead, you receive a 20% tax credit on the mortgage interest paid. Limited companies are not subject to Section 24 and can still deduct mortgage interest in full as a business expense.
9. Travel Costs
You can claim travel costs for journeys made specifically for your rental property, such as travelling to carry out an inspection or oversee repairs. You cannot claim regular monitoring visits or travel to collect rent.
For vehicle use, keep a mileage log. HMRC allows 45p per mile for the first 10,000 miles and 25p per mile after that under the approved mileage rate.
10. Phone and Communication Costs
The business proportion of your phone bill relating to property management is deductible. If you use your phone entirely personally except for occasional property-related calls, you can only claim the proportion that relates to the rental business.
Replacement of Domestic Items Relief
If you let a furnished or part-furnished property, you cannot claim the initial cost of furnishing it. However, when you replace an item on a like-for-like basis, you can claim the replacement cost under the Replacement of Domestic Items Relief (RDIR).
Qualifying items include:
- Sofas, beds, and other furniture
- White goods such as washing machines and fridges
- Carpets and flooring
- Curtains and blinds
- Kitchenware and crockery
The relief is limited to the cost of a like-for-like replacement. If you upgrade to a better or more expensive model, you can only claim the cost of the equivalent replacement, not the full cost of the upgrade.
Pre-Letting Expenses
Expenses you incur before a property is first let can sometimes be claimed. HMRC allows pre-letting expenses that are incurred in preparation for renting out the property, provided the property was available to let within a reasonable timeframe.
This includes advertising costs, repair costs to make the property rentable, and professional fees. However, capital costs such as purchasing or significantly improving the property are not deductible as revenue expenses.
What Landlords Cannot Claim
| Expense | Why It Is Not Allowable |
| Mortgage capital repayments | Capital expenditure, not a revenue expense |
| Property improvements and upgrades | These add value to the property rather than maintain it |
| Personal clothing | Not wholly and exclusively for the rental business |
| Initial furnishing costs | Cannot be claimed when first furnished (use RDIR for replacements only) |
| Fines and penalties | HMRC does not allow penalties as deductible expenses |
| Private use portion of expenses | Only the business proportion is deductible |
| Legal fees for granting a new long lease | Capital rather than revenue in nature |
Furnished Holiday Let Expenses
Furnished Holiday Lets (FHLs) have their own set of tax rules. Until April 2025, FHLs were treated as a trade rather than an investment, allowing landlords to claim capital allowances, deduct mortgage interest in full, and access business asset disposal relief on sale.
From April 2025, the FHL tax regime was abolished. FHLs are now taxed the same as standard residential lets, including being subject to Section 24 mortgage interest restrictions. If you own an FHL, speak to an accountant about how this change affects your position.
Frequently Asked Questions
Can I claim the cost of a new kitchen as a landlord expense?
It depends. Replacing a broken or worn kitchen with an equivalent new kitchen is a repair and is allowable. Installing a kitchen in a property that previously had none, or significantly upgrading to a higher specification, is an improvement and is not deductible as a revenue expense. The cost of an improvement may qualify as a capital expense that reduces Capital Gains Tax when you sell the property.
Can I claim a home office as a landlord?
If you use part of your home exclusively and regularly for managing your rental properties, you may be able to claim a proportion of your home running costs such as heating, electricity, and broadband. HMRC scrutinises home office claims carefully. The proportion claimed must be reasonable and based on the actual use of the space.
Can I claim expenses when the property is empty?
Yes, in most cases. Expenses incurred while the property is between tenancies and actively being made available to let are generally allowable. This includes mortgage interest relief, insurance, repairs, and advertising costs. If the property is withdrawn from the rental market and used personally, expenses during that period are not deductible.
How do I prove my landlord expenses to HMRC?
Keep receipts, invoices, bank statements, and records of all expenses. HMRC can request evidence to support any expense claimed on your Self Assessment return. Digital records are acceptable. A spreadsheet recording income and expenses with supporting documents is sufficient for most landlords.
Can I claim wear and tear allowance?
No. The wear and tear allowance was abolished in April 2016 and replaced by the Replacement of Domestic Items Relief. You can no longer claim a blanket 10% of rental income for wear and tear. You can only claim when you actually replace an item.
Need Help Claiming the Right Landlord Expenses?
M&B Tax Services prepares landlord accounts and Self Assessment returns for property owners across the UK. We make sure every allowable expense is claimed correctly and your tax bill is as low as it legally can be.
We are ICB-regulated accountants based in Rugby. Whether you have one property or a growing portfolio, we deal with the numbers so you do not have to.
Book a free 30-minute call and we will review your rental accounts at no cost.
Joanna Bruty
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