Allowable Expenses for Landlords: What You Can Claim Against Rental Income

Reviewed: 12 October 2026 | Applies to: UK landlords receiving rental income (England, Wales, Scotland and Northern Ireland). General information only – not personal tax advice. Check GOV.UK/HMRC guidance or a qualified adviser for your facts.

Allowable expenses are the day-to-day running costs of letting that an unincorporated UK landlord may deduct from rental income when working out taxable profit. The core test comes from HMRC’s Property Income Manual: each cost must be incurred wholly and exclusively for the rental business. Costs with a private or dual purpose are normally excluded, and apportionment applies only where the rules allow it. Capital spending is dealt with separately.

In this guide: What you can claim – Repairs vs improvements – What is not allowable here – Replacement of domestic items – Records, Self Assessment and MTD – Who and what this guide does not cover – Worked mini-example – Official sources

What you can claim: standard deductible running costs

HMRC’s starting point is the GOV.UK guidance on working out rental income, supported by the deductions area of the Property Income Manual (PIM2000). Each category below is deductible only so far as it meets the wholly-and-exclusively test in PIM2020. A cost that fails that test is not saved by appearing on this list.

Letting and management costs: agent commission, advertising for tenants and tenancy-arrangement fees, where incurred for the letting business.
Insurance: buildings, contents (landlord-owned) and rent-guarantee premiums for the let property.
Professional fees: solicitor, accountant and surveyor fees for running the letting (not for purchase, sale or capital works).
Rent, rates and utilities you pay: ground rent, service charges, council tax, water and energy bills for periods where the landlord bears the cost (for example voids or inclusive rents).
Services and maintenance contracts: cleaning, gardening, communal-service charges and safety servicing (such as gas and electrical checks) for the let property.
Licensing and compliance costs: selective or HMO licence fees and directly related compliance outlay.
Travel and motor costs: only at approved scope and with records – see the GOV.UK renting overview (renting out a property) and PIM. Private or dual-purpose journeys do not qualify.
Office and admin costs: phone, stationery, software and similar overheads so far as used wholly and exclusively for the rental business.

Landlords using the Tax and Finance hub routes for wider rental-tax planning should treat this list as running costs only. Finance costs and capital spending sit outside it.

Repairs vs improvements: the revenue-capital boundary

The distinction that causes most errors is between a repair (revenue, potentially deductible) and an improvement (capital, not deductible from rental income). HMRC’s repairs and replacement area (PIM2140) frames it this way:

Repairs reinstate. Mending a leaking roof, repainting to the prior standard, replacing a broken boiler with the nearest modern equivalent – these restore the property to its former condition.
Improvements enhance. An extension, a loft conversion, upgrading single glazing to full double glazing as part of a bigger upgrade, or adding something that was not there before – these go beyond reinstatement and are capital.

Two fine points are signposts only: the nearest-modern-equivalent point (a like-for-like replacement using currently available materials is normally still a repair) and incidental improvement (a small uplift that inevitably comes with a genuine repair does not by itself turn it into capital). Both turn on the facts – use the PIM links above and take advice where the line is unclear. Capital spending is not lost entirely: it can feed into the base cost for Capital Gains Tax on disposal, which is why this guide links to the Capital Gains Tax on buy-to-let guide rather than covering CGT here.

What is not allowable here

Mortgage and loan interest: not an allowable deduction for unincorporated residential landlords. It falls under the finance-cost restriction and basic-rate reducer instead. See the Section 24 guide – this page does not re-explain that relief.
Capital improvements: extensions, conversions and enhancements belong to the CGT base-cost route, not to rental-income deductions.
Purchase and sale costs: stamp duty, conveyancing on acquisition or disposal and similar capital transaction costs are not running expenses.
Private and dual-purpose costs: living accommodation, personal travel, clothing and other non-business or mixed spending fail the wholly-and-exclusively test.
Client entertainment-type exclusions and fines: entertaining and penalties do not qualify as rental deductions.

Replacement of domestic items relief: a separate relief

Replacement of domestic items relief is not a general repair. It is a separate relief with its own conditions: it applies when a landlord replaces furniture, furnishings, appliances or kitchenware in a let residential property where the item is no longer usable, and the deduction is for a like-for-like (or nearest equivalent) replacement. The initial cost of furnishing a property does not qualify, and any improvement element or disposal proceeds adjust the claim. Check the GOV.UK working-out-rental-income guidance and PIM before claiming, and keep invoices showing what was replaced and why.

Records, Self Assessment and Making Tax Digital

Keep receipts, invoices, bank evidence, tenancy and agent statements, mileage logs and a clear note of the business purpose for each cost. Rental profit is reported through Self Assessment, and record-keeping duties are tightening under Making Tax Digital for Income Tax – check MTD eligibility guidance and the Making Tax Digital guide for landlords for the reporting route. This guide covers what counts as an expense; the MTD guide covers how and when records and updates are submitted.

Who and what this guide does not cover

Companies: different corporation-tax rules apply to company landlords.
Non-resident landlords: withholding and reporting sit under the Non-Resident Landlord Scheme route.
Former furnished holiday lettings: the FHL regime boundary needs its own check against current GOV.UK guidance.
Cash basis vs accruals and capital allowances: accounting-basis choices and any plant-and-machinery allowance claims turn on individual facts – take advice.

Worked mini-example (illustrative only, not advice)

Assume a landlord receives 12,000 pounds of rental income in a tax year and pays 1,200 pounds in letting-agent fees, 400 pounds in landlord insurance, 600 pounds for a like-for-like boiler replacement (repair) and 300 pounds of landlord-paid service charges, all wholly and exclusively for the letting. Allowable running costs total 2,500 pounds, leaving 9,500 pounds of rental profit before any other reliefs or tax. If the same landlord also pays 3,000 pounds of mortgage interest, that interest is not deducted here – it is dealt with under the Section 24 reducer route. If the landlord also builds a 15,000-pound extension, that is capital and belongs to the CGT base-cost route, not to this calculation. Figures are rounded and simplified to show the structure only.

Tax boundary: this guide is general information about HMRC’s rental-expense framework. It does not decide any individual’s liability, apportion mixed-use costs or give personal tax planning. Use the official sources below and take qualified advice for your facts.

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