What Are Allowable Expenses?
Allowable expenses are costs you can deduct from your rental income before calculating your tax liability. HMRC only permits deductions for expenses that are “wholly and exclusively” for the purpose of renting out a property.
These deductions can reduce your taxable profit and ultimately lower your tax bill.
Common Allowable Expenses for Landlords
Here are some of the most common allowable expenses for landlords:
General maintenance and repairs such as fixing leaks, repainting or replacing broken fixtures. Improvements that increase the property’s value, for example building an extension or adding a conservatory, are classed as capital expenditure and cannot be deducted from rental income. These costs may instead be offset against capital gains tax when you sell the property.
Utility bills, council tax and service charges if paid on behalf of tenants.
Insurance premiums for landlord policies covering buildings, contents and liability.
Letting agent and professional fees including accountants, solicitors and surveyors where the work relates directly to the rental business.
Mortgage interest relief is now limited. Since April 2020, landlords can no longer deduct mortgage interest from rental income. Instead, you receive a 20% basic rate tax credit, which can reduce your final bill but may increase your taxable profit on paper. This is a key area where professional advice makes a real difference.
Replacement of domestic items such as furniture, appliances and kitchenware, provided they are like-for-like. Upgrades or improvements do not qualify.
Travel expenses for journeys made wholly for rental business purposes, for example visiting the property to arrange repairs or meet tenants. Mileage or public transport costs can usually be claimed.
Expenses Landlords Cannot Claim
Not every cost linked to a rental property can be deducted. Common examples that fall outside allowable expenses for landlords include:
The full cost of property improvements (capital expenditure)
Personal expenses not related to the rental business
The private-use proportion of costs, for example if you live in the property part-time
These areas can sometimes be misunderstood, which is why clear record-keeping and professional guidance are so important.
Record-Keeping Responsibilities
HMRC expects landlords to keep accurate records of income and expenses for at least five years after the 31 January submission deadline of the relevant tax year. This includes invoices, receipts, bank statements and contracts.
Good record-keeping not only ensures compliance but also makes it easier to identify legitimate landlord tax deductions in the UK and avoid disputes with HMRC. Digital tools and professional bookkeeping support can take the pressure off, especially for landlords managing multiple properties.
Thinking Beyond Annual Expenses
While it is important to understand day-to-day deductions, landlords should also consider the bigger picture. For example, how property income interacts with your wider personal tax position, or how to structure ownership between spouses or partners.
Careful planning can reduce liabilities across the board and form part of long-term wealth planning and estate considerations. This is where advice from experienced specialists goes beyond the numbers and helps landlords protect both current income and future assets.
How to Claim Landlord Tax Deductions in the UK
To claim landlord tax deductions in the UK, landlords must file a Self Assessment tax return each year, declaring rental income and allowable expenses. Accurate record-keeping is essential, as HMRC can request evidence of any claims made.
If you have multiple properties, expenses can usually be pooled across your property business rather than applied to each property individually.
Why Work With Wisteria?
Navigating the rules around landlord tax relief in the UK can be complex, especially when it comes to deciding what qualifies as an allowable expense and what falls under capital expenditure. Mistakes can lead to missed opportunities for relief or costly penalties.
At Wisteria, our experienced advisers specialise in accountancy and tax services for landlords. We provide practical advice tailored to your circumstances, ensuring that you make the most of every allowable expense for landlords while staying fully compliant with HMRC rules.
Our team offers clear guidance on record-keeping, mortgage interest relief, property-related expenses, and long-term tax planning strategies. Many landlords see us as an extension of their team, approachable specialists who take the stress out of compliance and provide reassurance that nothing has been missed.
Whether you are a first-time landlord or managing a growing portfolio, Wisteria is here to help you save time, reduce tax liabilities, and plan confidently for the future.
Contact our tax specialists today to discuss how we can support you with your rental property finances.