Landlord Tax Guide: Allowable Expenses You’re Probably Missing

If you are a landlord in the UK, the expenses you claim against your rental income directly affect how much tax you pay. Yet many landlords consistently miss legitimate deductions, often paying hundreds or even thousands of pounds more in tax than they need to. This guide covers every allowable expense available to you for the 2025/26 tax year, including the ones most landlords overlook.

The Complete List of Allowable Expenses for Landlords

Mortgage Interest and Finance Costs

Since the Section 24 restriction was fully phased in from April 2020, residential landlords can no longer deduct mortgage interest as an expense. Instead, you receive a 20% tax credit on your finance costs. This means higher-rate (40%) and additional-rate (45%) taxpayers effectively pay more tax on rental income than before the restriction.

Finance costs that qualify for the 20% credit include:

• Mortgage interest payments
• Interest on loans taken out to buy furnishings or carry out repairs
• Fees incurred when taking out or repaying mortgages or loans
• Alternative finance arrangement returns (e.g. Sharia-compliant products)

Repairs and Maintenance

You can claim the full cost of repairs, maintenance, and like-for-like replacements. The key distinction is between repairs (allowable) and improvements (not allowable as revenue expenditure). For example:

• Allowable: Replacing a broken boiler with a similar model, repainting walls, fixing a leaking roof, replacing worn carpets
• Not allowable: Adding an extension, converting a loft, installing a brand-new kitchen where there was none before

If you replace something with a modern equivalent (e.g. single-glazed windows with double-glazed), HMRC generally considers this a repair provided there is no significant improvement in the property’s value beyond the original state.

Insurance

All insurance premiums related to the rental property are deductible:

• Landlord buildings insurance
• Landlord contents insurance
• Rent guarantee insurance
• Public liability insurance

Letting Agent and Management Fees

Fees paid to letting agents, property management companies, or rent collection services are fully deductible. This includes tenant-finding fees, inventory costs, and ongoing management charges.

Legal and Professional Fees

You can claim professional fees directly related to managing your rental property:

• Accountancy fees for preparing rental accounts and tax returns
• Legal fees for renewing tenancy agreements (but not the initial purchase of the property)
• Legal fees for evicting a tenant
• Fees for debt collection on unpaid rent

Note: Legal fees for buying or selling the property are capital costs and cannot be claimed as revenue expenses. They can, however, be deducted from any capital gain when you sell.

Travel Expenses

You can claim travel costs for journeys between your home and rental property, or between properties, for the purpose of property management. You can use either:

• Actual costs: Fuel, parking, tolls, congestion charges
• HMRC mileage rates: 45p per mile for the first 10,000 miles, then 25p per mile

You cannot claim commuting costs if your rental property is also your main place of business.

Council Tax and Utility Bills (Void Periods)

If the property is empty between tenancies, any council tax and utility bills you pay during the void period are allowable expenses. When a tenant is in the property and pays these costs directly, you cannot claim them.

Ground Rent, Service Charges, and Maintenance Fees

For leasehold properties, ground rent and service charges are deductible. This includes payments to a management company for communal area maintenance in blocks of flats.

Advertising for Tenants

Costs of advertising the property for let, including online listing fees, newspaper adverts, and signage, are all allowable.

Telephone and Stationery

The business proportion of telephone calls related to managing your properties is deductible, as are stationery and postage costs.

Replacement of Domestic Items Relief

Since April 2016, the old wear-and-tear allowance for furnished properties was replaced by Replacement of Domestic Items Relief. You can claim the cost of replacing furnishings, appliances, and kitchenware provided to tenants, minus any amount received for the old item. This covers:

• Moveable furniture (beds, sofas, tables, chairs)
• Furnishings (curtains, carpets, linen)
• Household appliances (fridges, washing machines, televisions)
• Kitchenware (crockery, cutlery)

Common Mistakes Landlords Make

1. Claiming improvements as repairs: HMRC will disallow the deduction and may charge interest and penalties
2. Forgetting about mileage: If you visit your properties regularly, the mileage claim can be substantial
3. Ignoring void-period costs: Council tax, insurance, and utilities during empty periods are all claimable
4. Not keeping receipts: HMRC can enquire into your return and you need evidence for every claim
5. Claiming mortgage interest as an expense: Remember, it is now a 20% tax credit only for residential lets
6. Missing professional fees: Your accountant fees for rental accounts are deductible against rental income

Let Us Maximise Your Deductions

At HS Global Accountancy, we specialise in tax services for UK landlords. We ensure every legitimate expense is claimed, your return is accurate, and you pay only the tax you owe. Whether you have one buy-to-let or a portfolio of twenty properties, our team knows exactly what HMRC expects.