What expenses can landlords deduct from rental income?

Deductible revenue expenses include letting agent fees, insurance, repairs and maintenance, ground rent, service charges, utility bills (if paid by landlord), accountancy fees, advertising, and travel directly related to the property business.

Can I claim mortgage interest as an expense?

Not as a full deduction. Since April 2020, individual landlords receive a 20% tax credit on finance costs under Section 24. See our [[section-24-mortgage-interest-england|Section 24 guide]] for worked examples.

What is the difference between repairs and improvements?

Repairs restore the property to its original condition (replacing a broken boiler, repainting) and are revenue-deductible. Improvements add value or extend life (extensions, new kitchens beyond like-for-like) and are capital expenditure.

Can I claim furniture and furnishings costs?

For furnished lets, you can use the Replacement of Domestic Items Relief (RDIR) for replacing items like sofas, white goods, and carpets. Initial purchase of furnishings is not deductible but may be a capital cost.

Do I need receipts for every expense?

Yes. HMRC requires evidence for all claims. Digital records with dates, amounts, descriptions, and receipts are best practice. Software that links expenses to properties simplifies year-end reporting.

Landlord Allowable Expenses in England: What You Can Claim

Landlord Allowable Expenses in England: What You Can Claim | Zenancy

How landlord tax relief works in England

Landlords in England pay income tax on rental profits — total rental income minus allowable expenses. Only expenses incurred wholly and exclusively for the purposes of the rental business qualify. Personal costs, even if related to the property, are not deductible.

Fully allowable revenue expenses

Expense category	Examples	Notes
Letting agent fees	Management fees, tenant find, inventory	Fully deductible
Insurance	Buildings, contents, rent guarantee	Fully deductible
Repairs & maintenance	Plumbing, decorating, appliance repair	Revenue — not improvements
Ground rent & service charges	Leasehold costs	Fully deductible
Utilities & council tax	If paid by landlord	Fully deductible
Accountancy & legal	Tax return prep, eviction advice	Directly related only
Advertising	Listing fees, signage	Fully deductible
Travel	Mileage to property for business	At HMRC approved rates

Expenses you cannot deduct

Expense	Why not deductible	Alternative
Mortgage capital repayments	Capital, not revenue	Section 24 finance cost credit
Property improvements	Capital expenditure	Add to CGT base cost
Initial furniture purchase	Capital	RDIR on replacement
Personal phone/time	Not wholly for business	Apportion if mixed use
Fines and penalties	Not a business expense	None

Repairs vs improvements

Repair: fixing a leaking roof tile — deductible.
Repair: replacing a broken window with equivalent — deductible.
Improvement: converting loft to bedroom — capital, not deductible.
Improvement: upgrading kitchen beyond like-for-like — capital.
HMRC BIM46900 provides detailed guidance on borderline cases.

Record-keeping requirements

Keep receipts and invoices for all expenditure.
Record the property each expense relates to.
Separate capital purchases from revenue repairs.
Track agent fees and maintenance costs per property.
Retain records for at least five years after the 31 January submission deadline.

Landlord Allowable Expenses in England: What You Can Claim

Key takeaways

How landlord tax relief works in England

Fully allowable revenue expenses

Expenses you cannot deduct

Repairs vs improvements

Record-keeping requirements

Frequently asked questions

Official sources

Track every expense from job to tax return