Knowing exactly what you can and can't claim as an allowable expense against your rental income makes a real difference to your tax bill - and it's an area where landlords commonly either under-claim (paying more tax than they need to) or over-claim (risking an HMRC enquiry). Allowable expenses must be incurred wholly and exclusively for renting out the property, and must be revenue costs rather than capital costs.
Common allowable expenses include letting agent and management fees, landlord insurance, repairs and maintenance (as opposed to improvements), utility bills paid by the landlord, ground rent and service charges, accountancy fees, and travel costs related to managing the property. Mortgage interest is treated separately under Section 24 rather than as a normal expense - a distinction that trips a lot of landlords up.
This guide provides a complete, practical list of what counts as an allowable expense, what doesn't (and why), the often-confused line between a "repair" and an "improvement", and tips for keeping the kind of records that make Self Assessment - and any future Making Tax Digital submissions - far less stressful.
The full guide will cover: