What Expenses Can Landlords Claim? (And What Records to Keep)
- Kieran Thwaites
- 5 days ago
- 6 min read
HMRC taxes your rental profit, not your rent. That means every allowable expense you claim comes straight off your tax bill - a £1,000 expense saves a basic-rate taxpayer £200, and a higher-rate taxpayer £400. Yet we regularly see landlords doing one of two things: under-claiming and paying more tax than they need to, or over-claiming and risking an HMRC challenge.
This guide sets out exactly what you can and can't claim, where the tricky lines fall, and what records HMRC expects you to keep. It's part of our landlord series of simple explainers and sits beneath our main Rental Property Tax Guide, which covers the wider picture.
📋 Table of Contents
✅ The Golden Rule: Wholly and Exclusively
An expense is only allowable if it's incurred wholly and exclusively for your rental business. If a cost has a mixed personal and business use - your phone, or your car - you can claim the business proportion, provided you can show how you worked it out.
🧾 What You Can Claim
The day-to-day running costs of letting a property are allowable:
Letting agent and management fees, including tenant-finding fees
Landlord insurance (buildings, contents, rent guarantee)
Repairs and maintenance that restore the property to its previous condition
Council tax, utilities, ground rent and service charges where you pay them rather than the tenant
Accountancy and legal fees relating to the letting (not to buying or selling the property)
Advertising for new tenants
Landlord licensing fees under selective or additional licensing schemes
Professional subscriptions, such as NRLA membership
Admin costs: stationery, postage, business phone calls, property software subscriptions
Replacement of domestic items (see below)
Travel to the property for genuine business reasons (see below)
🔨 Repairs vs Improvements: The Big One
This is where most mistakes happen, so it's worth being precise:
A repair restores the property to its previous condition. It's allowable now, against your rental income. Examples: fixing a boiler, replacing broken roof tiles, repainting between tenancies.
An improvement makes the property better than it was. It's a capital cost, so you can't claim it against rental income - but you can deduct it from your gain when you eventually sell, reducing your Capital Gains Tax.
So a like-for-like replacement worktop is a repair; a whole new upgraded kitchen is an improvement. Replacing single glazing with double glazing is usually treated as an improvement.
One useful nuance: if a broken item is replaced with the modern equivalent - a dead boiler swapped for a more efficient current model - HMRC generally still accepts this as a repair, because the improvement is incidental to a necessary repair rather than the point of the work.
🛋️ Replacing Furniture and Appliances
Under Replacement of Domestic Items Relief, you can claim when you replace things like sofas, beds, carpets, curtains, white goods, and crockery. Two important limits:
You can't claim the initial purchase when you first furnish a property - only replacements of items that have worn out.
The claim is capped at the cost of a like-for-like replacement. Upgrade a basic fridge to a large American-style fridge-freezer and you can only claim what an equivalent basic model would have cost.
Worth noting: the old 10% Wear and Tear Allowance was scrapped back in April 2016, so this relief is what replaced it. And since the furnished holiday lettings regime ended on 6 April 2025, former FHL landlords now use this relief too, rather than the capital allowances they used to claim.
🚗 Travel and Home Office Costs
You can claim for genuine property-business journeys - inspections, meeting tenants or contractors, collecting rent, buying materials - using HMRC's approved mileage rates of 45p per mile for the first 10,000 miles, then 25p. Keep a mileage log.
What you can't do is claim a journey that was combined with a personal trip, or routine travel to a regular base of operations.
If you run the lettings admin from home, you can claim a reasonable proportion of your household costs. Keep a note of how you calculated the apportionment - HMRC may ask.
❌ What You Can't Claim
Capital improvements (extensions, upgraded kitchens, new conservatories)
The cost of buying the property, including the SDLT you paid on purchase
Mortgage capital repayments (only the interest gets relief, and only as a credit)
Your own time spent managing the property
Personal expenses, or the personal share of any mixed-use cost
Costs of selling the property - though these do reduce your capital gain
🏦 Mortgage Interest: A Special Case
Mortgage interest isn't an expense any more. Since April 2020, individual landlords get a 20% basic-rate tax credit on finance costs instead of deducting them from profit. This matters most if you're a higher-rate taxpayer, and it's set to rise to 22% when the new property tax rates arrive in April 2027. Limited companies are treated differently - they still deduct finance costs in full, which is one reason some landlords look at owning property through a company.
🧮 Worked Example: Michelle's Rental Year
Michelle lets one property for £14,400 a year (£1,200 a month). Over the year she pays:
Letting agent fees: £1,440
Landlord insurance: £320
Boiler repair: £450
Replacement washing machine (like-for-like): £280
Gas safety certificate and maintenance: £150
Accountancy fees: £300
Mileage, 400 miles at 45p: £180
New conservatory: £12,000 ❌ not allowable - this is capital
Her allowable expenses total £3,120, giving a taxable profit of £11,280. The conservatory doesn't reduce her income tax at all, but she should keep the invoice - it'll reduce her capital gain when she sells.
If Michelle had forgotten the mileage, accountancy and washing machine, she'd have overstated her profit by £760 - costing her £152 in tax as a basic-rate payer, or £304 as a higher-rate payer.
📁 What Records to Keep, and for How Long
HMRC expects you to keep everything needed to support a correct return. In practice that means:
Invoices and receipts for repairs, maintenance and replacements
Letting agent statements and fee schedules
Insurance schedules
Mortgage statements showing your interest
Professional fees from accountants or solicitors
Your mileage log and home-office apportionment calculation
Bank statements on their own aren't enough - HMRC wants evidence of what the spending was actually for.
How long? Keep records for at least five years after the 31 January filing deadline for the relevant tax year. So records for 2025/26 need keeping until 31 January 2032.
One more thing: from April 2026, landlords with qualifying income over £50,000 must keep digital records and file quarterly under Making Tax Digital, with the threshold dropping to £30,000 in 2027 and £20,000 in 2028. If that's you, a shoebox of receipts won't cut it - our MTD for ITSA guide explains what's needed.
⚠️ Common Mistakes to Avoid
Treating an improvement as a repair. The most common error, and the one most likely to be challenged.
Claiming initial furnishing costs. Only replacements qualify, not the first set of furniture.
Claiming the full mortgage payment. Capital repayments get no relief at all, and interest is a credit, not a deduction.
Forgetting the small stuff. Mileage, accountancy fees, phone costs and software subscriptions add up, and are the most commonly missed.
Keeping only bank statements. Without invoices showing what was bought, a claim is hard to defend.
Not apportioning mixed-use costs. Claiming 100% of a phone bill used partly for personal calls invites problems.
💬 Frequently Asked Questions
Can I claim for the time I spend managing my property? No. Your own labour isn't an allowable expense, though the fees you pay someone else are.
Is a new kitchen allowable? A like-for-like replacement of worn-out units is usually a repair. A significantly upgraded kitchen is an improvement, so it's capital and only counts when you sell.
Can I claim expenses before the property is let? Pre-letting costs incurred wholly for the rental business, within seven years of letting starting, can generally be treated as incurred on day one - but the rules are fiddly, so it's worth checking your specific situation.
What if my expenses are more than my rent? You make a rental loss, carried forward against future rental profits. It can't normally be set against your other income.
Do I need receipts for everything? Yes, ideally. Bank statements alone don't show the nature of the expenditure, which is what HMRC needs to see.
💡 Key Takeaways
You're taxed on profit, not rent - every allowable expense reduces your bill directly.
Repairs are claimable now; improvements are capital and only reduce your gain on sale.
Replacement of Domestic Items Relief covers like-for-like replacements, never initial furnishing.
Mileage at 45p for the first 10,000 miles, plus a fair share of phone and home-office costs.
Mortgage interest is a 20% credit, not an expense (rising to 22% from April 2027).
Keep invoices and receipts for five years after the 31 January deadline - and digitally, if MTD applies to you.
📥 Free Download: Landlord Allowable Expenses Checklist
Want a simple checklist to work through at tax time? Download our Landlord Allowable Expenses Checklist - a one-page list of every claimable cost covered in this guide, plus the records to keep alongside each one.
📞 Not Sure What You Can Claim? Ask ASBA Accounting
At ASBA Accounting, we help landlords across Crawley and beyond claim everything they're entitled to, without straying into territory HMRC will question. We'll handle your tax return and make sure your records are ready for Making Tax Digital.
👉 Get in touch today or call us on 01293 525656 for friendly, straightforward advice.
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