What’s an allowable landlord expense, what’s not and how to record information accurately
Under MTD, landlords must keep digital records of income and expenses. However, HMRC does not prescribe a fixed chart of categories and does not need to see details of every receipt or individual transaction.
Instead, it is your responsibility to keep detailed digital records and submit quarterly summaries of your income and expenses through MTD-compatible software.
HMRC receives category totals, while the underlying records remain with you in case they are needed for inspection later on.
Information you should record digitally
For each transaction, your records should typically include:
- Date
- Amount
- Income or expense category
- Supplier or tenant (where appropriate)
- A brief description
- Supporting document (receipt or invoice)
This information stays in your records; HMRC only receives the summarised totals unless it later asks to inspect your records.
Your information needs to be recorded as individual items with accurate dates of transaction and in the appropriate expense category, including:
- Costs of services
- Financial costs
- Other costs
- Property repairs and maintenance
- Premises running costs
- Travel costs
- Professional fees
This chart guides you through the process:
| Category | Allowable | Notes | Disallowable | Notes |
| Cost of services | Cleaning & gardening | Cleaning between tenancies, regular gardening, window cleaning | ||
| Security/ Concierge | ||||
| Staff wages | ||||
| Drawings and private costs | Drawings | |||
| Fines for breaking the law | ||||
| Legal costs for buildings/machinery | ||||
| Advertising & marketing | Direct business costs | Political donations | ||
| Phone & postage costs | Non-landlord training course | For a new business or to expand into an unrelated business area | ||
| Printing & stationery | Gym membership | |||
| Utilities | Subscriptions | Eg Netflix | ||
| Computers & software | Includes subs for accountancy packages | Glasses/contact lenses | ||
| Use of home as an office | Childcare | |||
| Other costs | Storage | |||
| Landlord Association | Membership and training course costs | |||
| Bank charges | ||||
| Bank loan interest | ||||
| Mortgage fees | Mortgage arrangement or redemption fees | |||
| Purchase of property | ||||
| Sale of property | ||||
| General repairs | Boiler and plumbing repairs & servicing, replacing broken windows, decorating between tenancies | |||
| Financial costs | Decorating | |||
| Roof repairs | Bank loan repayments | |||
| Replacing broken items | Mortgage repayments and interest | |||
| Property | Small tools | |||
| Rent | Monthly rent, lease premiums, charges to tenants | Capital gains tax | ||
| Property repairs & maintenance | Council tax | Improvements that increase the value of the property, such as loft conversions, extensions, installing central heating where none previously existed. | ||
| Business tax | ||||
| Water | ||||
| Property insurance | Includes landlord building insurance, rent guarantee insurance | Initial furnishing of an unfurnished property | Not covered by Replacement of Domestic Items Relief | |
| Ground rent & service charges | ||||
| Premises running costs | Depreciation | |||
| Letting agent fees | Fees for management, tenant finding, inventories | |||
| Legal fees | ||||
| Surveyor fees | ||||
| Accountant fees | ||||
| Deposit protection scheme fees | ||||
| Data Protection ICO fees | ICO registration fees | |||
| Professional fees | ECIR reports | Electrical condition inspection reports | ||
| Gas safety checks | Solicitor’s fees on property purchase, tenancy agreements or lease renewals under 50 years Stamp duty | |||
| Court fees | ||||
| Essential furniture items, white goods | Like-for-like replacement only | Self-assessment tax payments | ||
| Simplified mileage or travel costs relating to property management and maintenance | Tenant deposits | |||
| Replacement of domestic items | ||||
| Travel costs (A) | Travel costs (D) | |||
| Travel costs (D) | Travel to work | Put to private | ||
| Parking & speeding fines | Put to private |
*From this guide, you should be able to identify the category your cost or expense comes under and whether it will qualify for tax relief.
There are various guides and explanations on the Gov.uk website:
https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income
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*Information correct at the time of publication
