Landlord allowable expenses checklist

What "allowable" means

An expense is allowable if it is incurred wholly and exclusively for the purpose of the property letting business. If a cost is partly personal, you can usually claim the proportion that relates to the rental.

Common allowable expenses

• Letting agent fees and management charges — including tenant find fees, ongoing management, and check-in/check-out
• Buildings and contents insurance
• Repairs and maintenance — see the separate article on repairs vs improvements
• Ground rent and service charges for leasehold properties
• Council tax and utilities during void periods, or where the landlord pays
• Cleaning, gardening, and other services the landlord provides
• Accountancy fees for the rental business
• Travel costs to inspect or maintain the property — usually the cheaper of mileage or actual cost
• Advertising a property to let
• Legal fees for evictions or short tenancy renewals (long-term leases are capital)

What you cannot claim

• The mortgage capital repayment portion (only interest qualifies — and that is now restricted under Section 24)
• Improvements (capital, not revenue)
• Personal travel that is not directly for the property business
• Costs incurred before the property was first let (with limited exceptions for pre-trading expenses within seven years)

Replacement of domestic items relief

For furnished and unfurnished residential lets, you can claim the cost of replacing domestic items — beds, sofas, white goods, crockery, curtains. The relief is for like-for-like replacement; if you upgrade, the deduction is capped at the cost of an equivalent replacement.

You cannot claim for the original purchase of these items when first furnishing a property — only replacements.

Keeping records

Keep receipts and invoices for every expense you claim. HMRC can ask for evidence up to six years after the tax year ends, so good record keeping is essential. A simple spreadsheet by property and category, plus a folder of scanned receipts, works well.

Summary

• Wholly and exclusively for letting = allowable
• Repairs are deductible; improvements are capital
• Mortgage interest gets a 20% tax credit only (Section 24)
• Replacement domestic items relief covers like-for-like furnishings