Introduction
Understanding what expenses you can claim against your rental income is essential for maximising your returns as a UK landlord. This guide covers everything you need to know about allowable deductions for the 2024/25 tax year.
Fully Deductible Expenses
Property Maintenance and Repairs
You can claim the full cost of:
- Repairs and maintenance (fixing, not improving)
- Painting and decorating
- Replacing like-for-like items (same quality sink, not an upgrade)
- Garden maintenance
- Cleaning between tenancies
Important: Improvements are NOT deductible as expenses. Installing a new bathroom where there wasn't one is an improvement. Replacing an existing bathroom is a repair.
Professional Fees
- Letting agent fees and commissions
- Accountancy fees
- Legal fees for evictions or rent disputes
- Property management software subscriptions
Insurance
- Landlord building insurance
- Contents insurance (for furnished lets)
- Rent guarantee insurance
- Public liability insurance
Utilities and Services (When Void)
- Council Tax during void periods
- Water rates during void periods
- Gas and electricity during void periods
Administrative Costs
- Stationery and postage
- Phone calls related to the property
- Advertising for tenants
- Inventory preparation costs
Partially Deductible: Mortgage Interest
Since April 2020, mortgage interest is no longer directly deductible. Instead:
- You receive a 20% tax credit on interest payments
- Higher rate taxpayers pay more tax than before
- Calculate the difference carefully for your returns
Example:
If you pay £5,000 in mortgage interest:
- Tax credit = £5,000 × 20% = £1,000
- This reduces your tax bill by £1,000
Capital Allowances
Some items qualify for capital allowances rather than expense deductions:
Replacement Domestic Items Relief
When you replace furniture or appliances in a let property:
- Claim the cost of the new item
- Minus the value of the old item
- Only for like-for-like replacements
What Qualifies:
- Furniture (beds, sofas, tables)
- White goods (fridge, washing machine)
- Carpets and curtains
- Kitchenware for furnished lets
Travel Expenses
You can claim travel costs for:
- Visiting the property for inspections
- Meeting tenants or contractors
- Collecting rent (if in person)
- Property viewings
Rates:
- 45p per mile for the first 10,000 miles
- 25p per mile thereafter
- Or claim actual costs (petrol, parking) with records
What You CANNOT Claim
Be careful to avoid claiming for:
- ❌ Your own time or labour
- ❌ Property improvements (capital expense)
- ❌ Mortgage capital repayments
- ❌ Personal clothing
- ❌ Entertaining tenants
How ManagementHub Simplifies Tax
Our platform helps you:
- Track all expenses automatically by category
- Store receipts digitally for HMRC compliance
- Generate reports ready for your Self Assessment
- Get AI guidance on what's deductible
Key Dates for 2025
- 5 April 2025: End of 2024/25 tax year
- 31 October 2025: Paper Self Assessment deadline
- 31 January 2026: Online Self Assessment deadline
Conclusion
Proper expense tracking can save you thousands in tax each year. The key is maintaining organised records throughout the year, not scrambling at tax time.
*Use ManagementHub's expense tracking and reporting features to stay organised and maximise your deductions.*