Landlord allowable expenses: what you can claim, and which MTD category it goes in
You can deduct costs that are wholly and exclusively for letting your property. Under Making Tax Digital (MTD) you also need to give each one a category. This guide lists the common costs from GOV.UK with the quarterly update category each one belongs in.
General information, not tax advice. Checked against GOV.UK on 20 October 2026. If your situation is unusual (mixed-use buildings, large refurbishments, companies), get advice from a qualified adviser.
Expenses you can usually claim
GOV.UK lists these as deductible if you pay for them yourself and they are for the letting business:
| Cost | MTD quarterly update category (UK property) |
|---|---|
| General maintenance and repairs (not improvements) | Property repairs and maintenance |
| Water rates, council tax; landlord, buildings and contents insurance; ground rents and service charges; rent you pay if you sublet | Rent, rates, insurance and ground rents |
| Letting agent and management fees; accountant’s fees; legal fees for lets of a year or less, or for renewing a lease of under 50 years | Legal, management and other professional fees |
| Services you provide to tenants, such as gardeners, cleaners, communal hot water | Costs of services provided, including wages |
| Travel for the letting business, including mileage (see below) | Travel expenses |
| Phone calls, stationery, advertising for new tenants, other direct costs | Other allowable property expenses |
| Interest on a loan to buy non-residential (e.g. commercial) let property | Non-residential property finance costs |
| Mortgage interest and loan costs for residential lets | Residential property finance costs (not deducted from rent: see our mortgage interest guide) |
The category names come from HMRC’s quarterly update direction, the legal list of what an MTD update must contain. It splits income into Total rent and Other income from property (plus lease premiums and reverse premiums), and has a separate Travel expenses line. The 2025-26 tax return’s UK property pages put travel under “other allowable property expenses”. Your MTD software asks for the direction’s categories.
Gas and electricity are on GOV.UK’s list of deductible costs if you pay them for the let. If you provide them to tenants as a service, the tax return notes put “services you provide to tenants” under costs of services. Where a cost could sit in two categories, pick one and use it consistently.
What you can’t claim
- Improvements (capital expenditure), such as an extension, or an upgrade rather than a like-for-like replacement. Keep the records anyway: they may reduce Capital Gains Tax when you sell.
- The whole mortgage payment. Only the interest element counts, never the capital repaid.
- Personal costs, including the private part of phone calls, and clothing (GOV.UK’s example is a suit worn to a letting meeting).
- Work to make a run-down property fit to let when you bought it cheaply because of its state. GOV.UK says this is likely to be capital, not repairs.
Where only part of a cost is for the letting business, you can claim that part.
Repair or improvement? Boilers, kitchens and bathrooms
GOV.UK’s test is whether you are restoring what was there or improving it:
- Renewing fixtures such as baths, washbasins or toilets is normally allowable as a repair, if it is like-for-like and not an improvement. Boilers: in 2024 HMRC corrected letters that had said a boiler upgrade wasn’t a repair. It accepted that replacing an old boiler with a more efficient model is allowable where the change is down to advances in technology and the new boiler does broadly the same job (reported by ICAEW). HMRC’s manual takes the same view: using modern, broadly equivalent materials doesn’t make a repair an improvement.
- Adding something that wasn’t there before, such as central heating in a property that had none, or clearly upgrading (for example, extending a kitchen), is capital. With large sums, take advice.
- If an insurer pays for part of a repair, or you keep a tenant’s deposit to cover damage, you can only claim the part of the cost not covered.
Replacing furniture, appliances and furnishings
Replacing furnishings or equipment is not a repair. For residential lets, though, replacement of domestic items relief lets you deduct the cost of replacing items such as:
- movable furniture (beds, free-standing wardrobes)
- furnishings (curtains, linens, carpets, floor coverings)
- appliances (TVs, fridges, freezers)
- kitchenware (crockery, cutlery)
Conditions: it must be a replacement, not the first purchase for the property. The new item must be for the tenant’s exclusive use, and the old one must no longer be available to them. It isn’t available for a room in your own home. If the new item is an upgrade (GOV.UK’s example is a sofa replaced by a sofa bed), you can only claim what a like-for-like item would cost. A more energy-efficient modern equivalent is not an upgrade. Add any disposal costs and take off anything you got for the old item.
On the tax return this relief has its own box (box 36 on the 2025-26 UK property pages). It is not one of the quarterly update expense categories, so check how your software records it. It is normally claimed with your year-end figures.
Mileage and travel
Landlords who aren’t companies can use a fixed mileage rate instead of actual motoring costs, unless they have already claimed capital allowances on the vehicle. For 2026-27 the rates are 55p a mile for the first 10,000 business miles in a car or van, then 25p, and 24p for motorcycles. Up to 2025-26 the car and van rate was 45p. Once you use the flat rate for a vehicle, you must keep using it for as long as you use that vehicle in the business. Keep a log of journeys made only for the letting business. Trips that are partly private (for example, combined with shopping) don’t count.
Cash basis: the date you paid decides the period
Most individual landlords use the cash basis by default: income counts when you receive it, and expenses when you pay them. It applies unless your receipts are over £150,000 or you opt out. So a repair invoiced in June but paid in July belongs in the July period. Under MTD that matters for which quarterly update it first appears in.
Recording expenses for MTD
- Each digital record needs the amount, date and category. You still keep receipts, invoices and bank statements as you always have.
- Simpler categorisation: if your UK property turnover is under £90,000 you can record just income or expense. Residential landlords must still flag restricted finance costs (mortgage interest).
- If a letting agent pays you net rent, record the gross rent and the agent’s fees and costs separately. GOV.UK says to ask for the full figure if you only know the net amount.
If you keep your records in a spreadsheet, our MTD Landlord Record Keeper has these categories as drop-downs and keeps mortgage interest separate. It is a record-keeping aid, not MTD-compatible software: you still need bridging software to send updates to HMRC. Not sure if MTD applies to you yet? Try the free MTD checker.
Sources (last checked 20 October 2026)
- GOV.UK: Work out your rental income when you let property (allowable and non-allowable expenses, repairs, replacement of domestic items, capital expenditure)
- HMRC: MTD for Income Tax quarterly update direction (categories, updated 27 March 2026)
- HMRC: Self Assessment UK property (SA105) form and notes (UK property notes 2026, for 2025-26; box contents, including box 36)
- HMRC Property Income Manual PIM2030 (repairs: is it capital?) and ICAEW: HMRC corrects advice on boiler repairs (19 March 2024)
- HMRC Property Income Manual PIM2220 (fixed-rate mileage for landlords: 55p for 2026-27, 45p before) and GOV.UK: Simplified expenses, vehicles
- HMRC Property Income Manual PIM1092 (cash basis default, £150,000)
- GOV.UK: MTD create digital records (amount, date, category; simpler categorisation; net income)