What Expenses Can Landlords Claim UK? Complete Tax Guide

What expenses reduce rental income?

Allowable expenses are costs you incur wholly and exclusively for the purpose of renting out your property. These are deducted from your rental income before calculating the tax you owe.

The key principle is that the expense must be revenue (day-to-day running costs), not capital (improvements or purchases that add value). Revenue expenses are deductible; capital expenses generally are not.

Full list of allowable expenses

Here's what you can claim as a UK landlord:

• Letting agent fees - Management fees, tenant-finding fees, rent collection
• Insurance - Landlord insurance, buildings insurance, contents insurance, rent guarantee insurance
• Repairs and maintenance - Fixing boilers, repairing roofs, redecorating between tenants
• Ground rent and service charges - Leasehold property costs
• Council tax - Only during void periods when you're liable
• Utilities - Gas, electricity, water if you pay them (not the tenant)
• Accountancy fees - For preparing rental accounts and tax returns
• Legal fees - Eviction costs, renewing tenancies (not initial purchase)
• Advertising costs - Finding new tenants
• Stationery and phone calls - Business-related correspondence
• Direct costs of letting - Inventory costs, tenant referencing

Quick reference: What's deductible?

Repairs vs improvements - the key distinction

Repairs restore something to its original condition and are deductible. Improvements make something better than before and are not deductible (but may reduce Capital Gains Tax when you sell).

Repairs (deductible):

• Replacing broken windows with equivalent glass
• Fixing a leaking roof
• Repainting walls the same colour
• Replacing a broken boiler with an equivalent model
• Fixing faulty wiring

Improvements (not deductible):

• Replacing single glazing with double glazing
• Adding a conservatory or extension
• Converting a loft into a bedroom
• Installing central heating where there was none
• Upgrading a kitchen to a higher specification

The test is: are you restoring something to its previous state, or making it better? If your old boiler breaks and you replace it with a modern equivalent, that's a repair. If you install a smart heating system that adds new functionality, that's an improvement.

What is Replacement Domestic Items Relief?

Replacement Domestic Items Relief (RDIR) lets landlords claim for replacing furniture, furnishings, and household items in residential lets. It replaced the old Wear and Tear Allowance in April 2016.

RDIR covers:

• Furniture - beds, sofas, wardrobes, tables, chairs
• Furnishings - curtains, carpets, linen
• Household appliances - washing machines, fridges, cookers
• Kitchenware - crockery, cutlery

Key rules:

• Must be a replacement (not initial purchase)
• Only available for residential lets
• Claim limited to cost of equivalent item
• If you upgrade, only claim the like-for-like cost
• Deduct any proceeds from selling/part-exchanging the old item

Example: Your old fridge breaks. A like-for-like replacement costs £300. You decide to upgrade to a fancy model costing £500. You can only claim £300 under RDIR.

Can I claim mortgage interest?

Not as an expense, but you get a 20% tax credit. This is due to Section 24 restrictions that were fully phased in from April 2020.

Previously, landlords could deduct all mortgage interest from rental income before calculating tax. Now:

• You cannot deduct mortgage interest from rental income
• Instead, you receive a tax credit worth 20% of your mortgage interest
• This affects higher-rate taxpayers most significantly
• Finance costs include mortgage interest, overdraft interest, and fees for loans to buy furnishings

For a detailed explanation of how this affects your tax bill, see our Section 24 mortgage interest guide.

Important: Mortgage capital repayments are never deductible and don't qualify for any relief.

Travel expenses

You can claim travel costs for journeys made wholly and exclusively for your rental business.

Allowable travel includes:

• Visiting properties for inspections
• Meeting tenants or contractors
• Collecting rent (if done in person)
• Purchasing materials for repairs
• Attending court for possession proceedings

You can claim:

• Actual costs - fuel, parking, train fares, or
• Mileage allowance - 45p per mile for first 10,000 miles, then 25p per mile

Keep a mileage log with dates, destinations, and reasons for each journey.

Working from home

If you use part of your home for managing your rental business, you may be able to claim a proportion of household costs.

You can either:

• Simplified method: Claim a flat rate based on hours worked (£10/month for 25-50 hours, £18/month for 51-100 hours, £26/month for 101+ hours)
• Actual costs method: Calculate the proportion of household bills relating to business use

The simplified method is easier but often gives a smaller deduction. For most landlords with just a few properties, the claim will be modest.

Record-keeping requirements

HMRC requires you to keep records for at least 6 years from the end of the tax year they relate to.

You must keep:

• Receipts and invoices for all expenses
• Bank statements showing rental income and payments
• Tenancy agreements
• Records of rent received and dates
• Mileage logs if claiming travel
• Details of any improvements (for CGT purposes)

From April 2026, landlords with rental income over £50,000 must comply with Making Tax Digital, which requires digital record-keeping and quarterly submissions.