Allowable expenses for landlords

Allowable expenses are those costs you can claim back from the government. To be eligible, they must have been incurred in providing your rental property and deemed reasonable by yourself. The main thing to remember about allowable expenses is that they must be directly related to running your rental business. Any indirect costs, such as those relating to personal use of goods cannot be claimed back as part of your tax return.

For example, if you need to buy a new boiler for your property, that is an allowable expense because it was required for the provision of the property. A boiler cover

boiler cover means the landlord can offset however much they spent repairing or replacing it. All insurance policies are classed as allowable expenses.

What expenses can a landlord claim back?

HMRC allowable expenses for landlords cover the costs of many things. A list of allowable expenses for landlords includes:

1. Maintenance and repairs

Landlords can claim any repairs or maintenance work to the property, whether it is replacing broken windows or painting walls. You can also claim money paid to a tradesperson such as a plumber or an electrician if you have not been reimbursed by your tenant. This includes materials used to complete the job.

2. Council tax and utility bills

For council tax, the landlord will be responsible for paying the bill. To claim a deduction on this expense, you must be able to provide evidence of payment and information such as:

  • The amount paid in council tax each year (e.g. to Merton Council)
  • Deduction claimed
  • Evidence of payment (e.g., invoice)

To work out the cost of council tax in Wimbledon you can look at the different bands. For example, a band A property in Wimbledon Common Area pays £1,205.74.

3. Fees and service charges

Service charge is usually paid every month, in addition to rent. It covers things like building insurance, central heating maintenance and upkeep, exterior cleaning and repairs, etc. Management charges are similar to service charges but are paid directly to the managing agent instead of going into a central pot. The landlord pays this directly to their agent each month instead of paying it indirectly through the service charge.

What expenses can landlords not claim a deduction for?

In addition to the expenses that landlords can claim, several expenses cannot be claimed. Interest payments are made on loans used to finance the purchase of a property or land. Capital allowances include things like allowance which covers energy-related charges, water supply charges, rent/purchase payments, gardening & cleaning services and finally capital expenditure incurred over time. For more real estate information be sure to browse our website.