Landlord Expenses
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UK landlord expenses you can claim on your personal tax return (property income) →
Letting agent, management and professional fees →
Repairs and maintenance (repairs vs improvement) →
Replacement of domestic items (furnished residential lets) →
Utilities, council tax and service charges (when you pay them) →
Cleaning, gardening and communal costs →
Travel (property-related mileage and subsistence) →
Telephone, internet and office costs (apportionment) →
Finance costs (mortgage interest and borrowing) – restricted relief →
“Non-deductible” items landlords often try to claim (and HMRC frequently challenges) →
How Karia Accountants helps – our simple step-by-step process →
Making Tax Digital for Income Tax (MTD ITSA) – current requirements (landlords) →
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UK landlord expenses you can claim on your personal tax return (property income)
This section is written for individual landlords completing a UK Self Assessment tax return (property pages). It is for revenue (running) costs incurred wholly and exclusively for your property letting business. Where something is capital (e.g., buying or improving the property), relief is usually given through Capital Gains Tax calculations on sale rather than as an income expense. HMRC’s Property Income Manual is the key reference point for how these rules apply in practice. GOV.UK
Throughout, Karia Accountants can help you categorise expenditure correctly (especially where the boundary between repairs vs improvement or revenue vs capital is unclear), so your claim is HMRC-compliant and optimised.
Letting agent, management and professional fees
Typically allowable (examples):
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Letting agent / management fees (tenant find, rent collection, inspections).
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Referencing and credit checks.
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Fees for preparing tenancy agreements (where it’s part of ongoing letting admin).
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Accountancy fees relating to your rental accounts/tax return (apportion if mixed).
Not allowable / common errors:
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Legal fees connected to buying/selling the property (usually capital, not an income expense).
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One-off “initial purchase” costs bundled into “professional fees”.
Practical note: If a bill covers personal and property elements, keep an apportionment working paper (time basis or reasonable split).
Repairs and maintenance (repairs vs improvement)
This is one of the most challenged areas. HMRC distinguishes:
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Repairs (revenue): restoring an asset to its original condition/standard.
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Improvements (capital): creating something better than the original, or adding something new.
HMRC’s repairs guidance for property income is in the Property Income Manual. GOV.UK
Typically allowable repairs (examples):
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Repainting between tenancies (like-for-like refresh).
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Fixing a leaking tap, broken boiler component, roof patch repair.
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Replacing rotten window frames like-for-like (generally repair).
Typically not allowable as an income expense (capital/improvement examples):
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Installing central heating where none existed before.
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Loft conversion / extensions.
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Upgrading to a significantly higher specification that goes beyond repair (facts matter).
Technical analysis (what HMRC looks at):
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“Replacement of the whole” vs replacing a part: replacing an entire asset may be capital; replacing parts is more often repair.
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Modern equivalent materials can still be a repair if the work is essentially restoration, not enhancement (e.g., unavoidable modern materials).
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If you buy a run-down property and do substantial works to make it lettable, part/all of the work can be treated as capital depending on the facts and timing.
Karia Accountants often recommends documenting: photos, contractor scope, and “before/after” descriptions to support the treatment.
Replacement of domestic items (furnished residential lets)
The old “wear and tear” allowance is gone; instead, landlords can claim Replacement of Domestic Items Relief when you replace certain movable items provided for tenant use (subject to conditions). HMRC’s detailed conditions are set out at PIM3210. GOV.UK+1
Typically allowable (examples):
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Replacing a sofa, bed, dining table/chairs, curtains, blinds, carpets.
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Replacing white goods (fridge, washing machine).
Key technical points:
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Relief is generally for a replacement (not the initial furnishing of an unfurnished property). GOV.UK
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If the replacement is an improvement, relief is restricted to the cost of the equivalent “old” item (you cannot simply claim the full upgraded spend without analysis). (See HMRC guidance and toolkits discussion of improvement restriction.) GOV.UK+1
Not allowable (common errors):
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First-time purchase of furnishings where there was nothing replaced.
Items that form part of the building (fixtures integral to the structure) rather than “domestic items” (facts and item type matter).
Utilities, council tax and service charges (when you pay them)
Typically allowable (examples):
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Gas/electric/water where the landlord pays (e.g., bills included lets).
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Council tax during voids (if landlord liable).
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Service charges and ground rent (revenue element) for leasehold property.
Not allowable / common errors:
Utility costs that are the tenant’s contractual responsibility (unless you pay and recharge—then treat gross vs net consistently).
Insurance
Typically allowable (examples):
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Buildings insurance.
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Landlord contents insurance.
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Public liability insurance (landlord policy add-ons).
Not allowable:
Insurance relating to purchasing the property (e.g., some transaction-linked costs may be capital/irrelevant).
Cleaning, gardening and communal costs
Typically allowable (examples):
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End-of-tenancy cleaning (if landlord bears the cost).
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Gardening/grounds maintenance for properties where landlord is responsible.
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Communal area cleaning/lighting (HMOs, blocks—if landlord pays).
Not allowable / common errors:
Improvements disguised as “maintenance” (e.g., landscaping that materially enhances the property rather than maintaining it).
Advertising and marketing
Typically allowable:
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Online listings, boards, photography for re-letting.
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Tenant find advertising.
Not allowable:
Branding/marketing that relates to a separate business activity (not your property business).
Travel (property-related mileage and subsistence)
Typically allowable (examples):
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Mileage to inspect property, meet agents/contractors, deal with issues.
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Reasonable travel costs where the purpose is wholly property-related.
Not allowable / high-risk:
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Travel that is private, dual-purpose, or mainly for personal reasons.
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Commuting-like trips where you effectively “base” yourself somewhere for personal convenience.
Evidence matters: mileage logs, dates, purpose, and route.
Telephone, internet and office costs (apportionment)
Typically allowable:
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Landline/mobile costs attributable to letting activity.
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Stationery, postage, small admin expenses.
Not allowable / common errors:
Claiming 100% of mixed personal bills without a reasonable apportionment.
Finance costs (mortgage interest and borrowing) – restricted relief
For individual landlords of residential property, mortgage interest and other finance costs are not generally deducted in full from rental profits; instead, relief is given as a basic rate (20%) tax reduction, subject to the statutory rules. HMRC covers the finance cost deduction restrictions and how interest is treated in the Property Income Manual, and the Government has also published an overview of the restriction. GOV.UK+1
Typically included as finance costs (examples):
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Mortgage interest (not capital repayments).
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Arrangement fees and certain loan-related charges (depending on nature).
Not allowable:
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Capital repayments of the mortgage/loan (never an income expense). GOV.UK
Technical note: The restriction can materially change the tax outcome for higher/additional rate taxpayers; planning is often required (e.g., ownership splits, incorporation considerations—case-specific advice needed).
“Non-deductible” items landlords often try to claim (and HMRC frequently challenges)
Examples that are usually not allowable as rental income expenses:
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Personal use costs (any private element).
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Capital improvements (extensions, new kitchens that are a spec uplift rather than repair, structural additions).
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Initial costs of buying the property (stamp duty, conveyancing, surveys—generally capital).
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Fines and penalties.
Your own time/labour (you cannot “charge” yourself).
How Karia Accountants helps – our simple step-by-step process
We guide you through the disclosure in a clear, structured, and non-judgemental way.
Step 1: Understand your situation
We start with a confidential discussion to understand:
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When the property was first let
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Which tax years are affected
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Whether income was UK or overseas
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Ownership structure (sole / joint)
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What expenses have already been claimed
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Whether any returns have already been filed
This allows us to determine:
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Whether the Let Property Campaign is appropriate
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How far back the disclosure needs to go
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The likely tax exposure and penalty range
There is no obligation to proceed at this stage.
Step 2: Provide a fixed-fee quote
Once we understand the scope, we provide:
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A clear fixed-fee quote
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No hourly billing
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No hidden costs
The fee depends on:
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Number of tax years involved
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Number of properties
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Complexity (e.g. overseas income, capital gains, joint ownership)
This gives you certainty before any work begins.
Step 3: Obtain all information from you
We then request the necessary information, such as:
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Rental income schedules (by year)
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Letting agent statements (if applicable)
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Mortgage interest summaries
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Repairs and allowable expenses
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Purchase details and ownership records
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Bank statements (where needed)
If records are incomplete, we help you reconstruct the figures using reasonable and HMRC-acceptable methods.
Making Tax Digital for Income Tax (MTD ITSA) – current requirements (landlords)
MTD ITSA is being phased in for individuals with qualifying income (which can include property income) above specific thresholds, with start dates dependent on the relevant tax year’s qualifying income. HMRC’s checker and the Government’s publication set out the current timetable and thresholds. GOV.UK+1
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Current rollout (as published by HMRC):
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From 6 April 2026 if qualifying income is over £50,000 (based on the 2024–25 tax year). GOV.UK+1
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From 6 April 2027 if qualifying income is over £30,000 (based on the 2025–26 tax year). GOV.UK
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From 6 April 2028 if qualifying income is over £20,000 (based on the 2026–27 tax year), per the Government’s published extension plans. GOV.UK+1
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What MTD ITSA generally requires in practice:
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Digital record-keeping using compatible software/spreadsheets.
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Quarterly updates, plus an end-of-period finalisation and a final declaration (process detail depends on HMRC specifications and software).
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