Quick answer:
Landlords can generally claim expenses incurred wholly and exclusively for renting out a property ,including repairs, letting agent fees, insurance, ground rent, service charges, and certain professional costs. Mortgage interest is handled through a separate finance-cost relief rather than as a straightforward expense.
Common allowable expenses
- Repairs and maintenance (not improvements).
- Letting agent and management fees.
- Landlord insurance.
- Ground rent and service charges.
- Utility bills and council tax you pay (e.g. during voids or for HMOs).
- Accountancy and certain professional fees.
- Replacing domestic items (within the relevant rules).
| You can claim | You can’t claim (as a running cost) |
| Repairs & maintenance | Improvements / upgrades (capital) |
| Letting & management fees | Your own time managing the property |
| Landlord insurance | Mortgage capital repayments |
| Ground rent & service charges | Mortgage interest as a deduction (20% credit instead) |
| Accountancy & letting legal fees | Private-use portion of any cost |
Repairs vs improvements
Repairs that restore something to its original condition are usually allowable; improvements that upgrade or add value are treated as capital, not running costs. The distinction matters, so record the nature of the work, not just the amount.
Mortgage interest and finance costs
Since April 2020 (the “Section 24” rules), individual residential landlords can no longer deduct mortgage interest from rental profit. Instead you record the gross rent, then get a basic-rate tax credit worth 20% of your finance costs, applied against your final tax bill.
Example: £10,000 of mortgage interest gives a £2,000 reduction in your tax bill, regardless of your tax rate. For basic-rate taxpayers the effect matches the old deduction; for higher-rate (40%) and additional-rate (45%) taxpayers it means notably more tax than under the old rules. (Limited companies still deduct finance costs in full.) From 2027/28, this credit is set to rise to 22%, tracking the new property basic rate. Record finance costs separately so they’re treated correctly at finalisation.
See the wider rules in our MTD for landlords guide.
Why tracking expenses well saves you money
Every allowable expense you capture reduces your taxable profit. Miss them, and you pay more tax than you need to. Digital capture means nothing slips through and your tax estimate stays accurate. Once you know what’s allowable, set up a system to track rental income and expenses. Multiple properties change how you record this, see MTD for multiple properties for more in-depth information.
How CleanBooksAI captures every expense
CleanBooksAI imports and categorises property expenses automatically, lets you attach receipts, and keeps finance costs recorded correctly ,so your claims are complete and your records are MTD-ready.
