What Expenses Can Landlords Claim Against Rental Income?

Being a landlord comes with various costs, but many expenses can be deducted from rental income when calculating taxable profit. Understanding which costs are allowable can help you complete your Self-Assessment tax return accurately.

Which Expenses Can Landlords Claim?

UK landlords can generally claim the following expenses, subject to HMRC rules:

• Repairs and maintenance: Fixing leaks, repairing boilers and redecorating.
• Letting agent fees: Tenant-finding, rent collection and property management charges.
• Insurance: Eligible buildings and landlord contents insurance.
• Utilities and Council Tax: Bills paid by the landlord where applicable.
• Legal and accountancy fees: Qualifying tenancy-related legal costs and accountancy fees.
• Cleaning and gardening: Eligible property maintenance and cleaning costs.
• Advertising costs: Expenses incurred when finding tenants.
• Replacement furniture: Qualifying replacement appliances, carpets and furniture.

Which Expenses Cannot Be Claimed?

Landlords generally cannot deduct property purchase costs, mortgage capital repayments, personal expenses or capital improvements from rental income.

For individual landlords letting residential property, qualifying mortgage interest generally attracts a basic-rate tax reduction rather than being deducted directly from rental income.

How Do You Calculate Rental Profit?

To calculate your rental profit, subtract allowable expenses from your rental income.

For example, if you receive £12,000 in rent and incur £2,000 in allowable expenses, your rental profit would be £10,000 before other tax adjustments.

Keep receipts, invoices and accurate financial records to support the figures on your tax return.

Prepare Your Tax Return with Dtax Filer

Managing rental income and expenses can make completing a Self Assessment tax return seem complicated. Dtax Filer helps individuals prepare and submit their tax returns online, making it easier to organise the information needed to report income and expenses.

Get your records ready and use Dtax Filer to make preparing your tax return simpler.

Disclaimer: This article provides general information on UK tax rules and is not personalised tax advice. Check the latest HMRC guidance for your circumstances.