“What expenses can I actually claim as allowable?”
Getting this right can make the difference between paying thousands in unnecessary tax or keeping more of your hard-earned income. But there’s a catch: HMRC’s rule is that expenses must be “wholly and exclusively” for the purpose of your rental business.
Let’s unpack what that means — and what you can actually claim.
Understanding HMRC’s “Wholly and Exclusively” Rule
This means the cost must be:
- Incurred entirely for your rental business
- Not mixed with personal use
If you spend money partly for business and partly for personal reasons, you might not be able to claim the full cost — or any of it.
Common Allowable Property Expenses
Here are the most common (and often missed) expenses you can claim:
1. Mortgage Interest (for personally owned properties)
- You can’t deduct full mortgage interest anymore if you own property in your name
- But you still get a 20% tax credit on your interest payments
2. Letting Agent Fees
- Fully allowable, including monthly management fees and tenant-finding services
3. Repairs and Maintenance
- Fixing broken boilers, roof repairs, plumbing
- Note: improvements (like adding an extension) are capital costs, not allowable against income
4. Insurance
- Landlord insurance, building insurance, contents insurance (for furnished properties)
5. Accountancy Fees
- Related to your rental income — fully allowable
6. Travel and Subsistence
- If your property isn’t nearby and you need to travel for inspections or maintenance, your travel and accommodation costs can be allowable.
Example: You stay overnight to inspect an out-of-town property — that hotel bill and mileage count.
7. Utilities and Council Tax
- If the property is vacant or bills are in your name (e.g., HMOs), these are deductible
8. Advertising and Marketing
- Promoting a property for rent on portals like Rightmove or Zoopla
9. Legal and Professional Fees
- Eviction costs, lease agreements, professional advice
- Note: legal fees on property acquisition are capital and not allowable against rental income
10. Phone and Office Costs
- Business phone usage, home office percentage (if you’re managing the portfolio yourself)
What’s NOT Allowable?
- Your Own Time — Sweat equity isn’t deductible
- Property Improvements — New kitchens, loft conversions = capital, not revenue
- Private Travel or Dual Purpose Expenses — You can’t claim fuel for a family holiday to view one property
Smart Tip: Track Everything Digitally
Use apps like Xero, FreeAgent, or QuickBooks to:
- Snap receipts
- Track expenses by property
- Export straight to your accountant
You’ll reduce missed claims and accounting headaches.
Real-World Example: Missed Overnight Costs
A landlord in Manchester needed to visit her buy-to-let in Bristol every quarter. She stayed overnight, dined locally, and claimed nothing — assuming it “wasn’t allowed.”
She missed £800 in expenses annually. That’s around £320 in tax relief — gone.
If she’d logged those trips and claimed under travel and subsistence, they would’ve been fully allowable.
Get Your Property Tax Setup Right
Property tax doesn’t need to be confusing — but missing allowable expenses means overpaying HMRC.
Our property tax specialists help:
- Identify and claim all allowable expenses
- Avoid mistakes that trigger HMRC scrutiny
- Track and plan deductions across your portfolio
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