If you are a landlord or have a portfolio of properties, you can claim ‘wholly incurred’ expenses against your property income. Expenses must follow the standard HMRC guidance and the expenses must be exclusively for the purpose of renting out the property.
HMRC provide a number of examples of allowable expenses including:
If you buy a new vacuum cleaner for your own home, and also use it to clean your rental property between tenants, you can’t claim the cost of the vacuum cleaner as an expense against your rental income.
However, you could claim the cost of any cleaning products you bought specifically for cleaning the rental property.
Where costs are incurred partly for your rental business and partly for some other purpose you may be able to claim a proportion of that cost if that part can be separately identified as being incurred wholly and exclusively for the purposes of the property rental business. More information on this is in the next section.
Allowable expenses include:
Mortgage interest – a proportion of this cost is now limited to basic rate Income Tax relief,
General maintenance and repairs to the property, but not improvements (such as replacing a laminate kitchen worktop with a granite worktop)
Water rates, council tax, gas and electricity
Insurance, such as landlords’ policies for buildings, contents and public liability
Costs of services, including the wages of gardeners and cleaners
Letting agent fees and management fees
Legal fees for lets of a year or less, or for renewing a lease for less than 50 years
Rents (if you’re sub-letting), ground rents and service charges
Direct costs such as phone calls, stationery and advertising for new tenants
Vehicle running costs (only the proportion used for your rental business) including mileage rate deductions for business motoring costs
Expenses you can’t claim a deduction for include:
the full amount of your mortgage payment – only the interest element of your mortgage payment can be offset against your income
private telephone calls – you can only claim for the cost of calls relating to your property rental business
clothing – for example if you bought a suit to wear to a meeting relating to your property rental business, you can’t claim for the cost as wearing the suit is partly for your rental business and partly to keep you warm – no identifiable part is for your property rental business
personal expenses – you can’t claim for any expense that was not incurred solely for your property rental business
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.