Allowable expenses for landlords and how to track them

Plenty of landlords worry they'll claim the wrong thing or miss out on money they're entitled to. Once you understand what counts, recording your expenses is manageable and you don't need an accountancy degree to do it.

What allowable actually means

An allowable expense is a cost you incur wholly and exclusively for the purpose of renting out your property. If you spent the money to run your rental business, it can usually be deducted from your rental income before tax is worked out.

That matters because you only pay tax on your profit, which is your rental income minus your allowable expenses. Keeping good records of those costs can make a difference to your tax bill.

Common expenses you can usually claim

These are the costs landlords most often claim. It isn't an exhaustive list, but it covers the everyday ones:

• General repairs and maintenance, such as fixing a leaking tap, repainting, or replacing a broken boiler part. These are repairs, not improvements.
• Letting agent and management fees, including tenant-find fees.
• Accountant or bookkeeping fees. The cost of help with your tax can itself be allowable.
• Buildings and contents insurance for the property.
• Ground rent and service charges on leasehold properties.
• Utility bills and council tax, where you pay them rather than the tenant.
• Legal and professional fees for shorter leases or tenancy renewals.
• Phone calls, advertising and stationery directly related to letting.
• Costs of services, such as a gardener or cleaner.

Mortgage costs are different. The rules changed a few years ago, and for most residential landlords you can't deduct mortgage interest as an expense. Instead it's handled as a separate tax reduction. Check the current position with HMRC or an accountant, as this is an area that trips people up.

Repairs versus improvements

This distinction is worth getting clear on. A repair restores something to its original condition, such as replacing a worn-out kitchen with one of a similar standard. An improvement upgrades the property, such as knocking through walls or fitting a far higher-spec kitchen than before.

Repairs are usually allowable against your rental income. Improvements generally aren't, because they're treated as capital costs and may instead matter when you eventually sell. If you're unsure which side of the line something falls, ask.

Record as you go

The biggest favour you can do yourself is to record expenses through the year, not in a panic the night before a deadline. Under Making Tax Digital for Income Tax, you'll need to keep digital records of your income and expenses anyway, so building a small habit pays off twice.

An approach that works:

1. Capture the receipt straight away. Snap a photo or save the email the moment you pay for something. A receipt you can't find is a deduction you can't claim.
2. Note what it was for. "Plumber, fixed leaking tap, Flat 2" is far more useful in six months than a bare amount.
3. Put it into your records monthly. A short monthly tidy-up beats a yearly mountain.
4. Keep personal and rental money separate where you can. Even a dedicated bank account makes everything clearer.

How this fits with your quarterly updates

If you're brought into MTD for Income Tax, you'll send HMRC four quarterly updates each tax year, plus one tax return after the year ends. MTD is being phased in by income: from 6 April 2026 for those with qualifying income over £50,000, from 6 April 2027 for over £30,000, and from 6 April 2028 for over £20,000. Those under £20,000 aren't required to join yet.

The quarters end on 5 July, 5 October, 5 January and 5 April, with updates due on 7 August, 7 November, 7 February and 7 May. From 2025-26 those updates are cumulative, running year-to-date totals rather than separate chunks, so consistent record-keeping makes each one straightforward. Your tax return is due by 31 January following the end of the tax year, the same date Self Assessment has always used.

Quarterwise keeps your digital records in one place and files your quarterly updates and tax return to HMRC, so the admin stays small and predictable.

A final word

Allowable expenses exist to make sure you only pay tax on genuine profit. Learn the common categories, keep a tidy running record, and ask when something's unclear.

This article is general information, not tax advice. Please check your own circumstances with HMRC or a qualified accountant.