Allowable Expenses for Landlords: What You Can Claim Against Rental Income

Every allowable expense you claim reduces your taxable rental profit — and therefore your tax. Yet landlords frequently overpay, either by missing legitimate costs or by getting the repairs-versus-improvements distinction wrong. Here’s a clear guide.

The basic rule

To be allowable, an expense must be incurred wholly and exclusively for renting out the property. Claim them correctly and you’re taxed only on your real profit. Our rental income tax calculator shows how expenses affect your bill.

Expenses landlords can usually claim

• Letting-agent and management fees
• Repairs and maintenance (see the crucial distinction below)
• Landlord insurance — buildings, contents, rent guarantee
• Ground rent and service charges
• Accountancy and professional fees
• Utility bills and council tax that you pay (including during void periods)
• Advertising for new tenants
• Cleaning, gardening and other services you provide
• Replacement of domestic items — like-for-like replacement of furniture and appliances

Repairs vs improvements — the big one

This trips up more landlords than anything else:

• Repairs restore the property to its original state — fixing a boiler, repainting, replacing a broken window. These are deductible against your rental income.
• Improvements make it better than before — an extension, a new conservatory, a kitchen upgraded to a much higher spec. These are capital, so they’re not deductible against income — but they may reduce your Capital Gains Tax when you sell.

A like-for-like replacement of a worn-out item is generally a repair; turning a basic bathroom into a luxury one is partly an improvement. Getting this split right (and recording it) matters both now and at sale.

What you can’t claim

• Mortgage interest as a normal expense — it’s handled under Section 24 instead (a 20% tax credit)
• Your own time
• Capital improvements against income
• The initial cost of furnishing a property (only replacements qualify)

Why records make the difference

The gap between a complete and an incomplete expense claim is almost always record-keeping. Capture every cost and receipt through the year — and with Making Tax Digital coming for landlords, digital records will soon be required anyway. That’s exactly what bookkeeping for landlords does: per-property records, repairs and improvements correctly split, ready for your tax return.

Claim everything you’re entitled to

Knowing what’s allowable — and splitting repairs from improvements correctly — can save a meaningful amount of tax every year, and more again when you sell. Our accountants for landlords make sure every legitimate expense is claimed and recorded properly, so you never pay tax on money you spent running your property.