What Can Landlords Claim? Allowable Expenses Explained for Kent Landlords

Ask ten landlords what they can claim against their rental income and you will get ten different answers — usually with a few costs missed and one or two claimed that should not be. Getting this right matters, because every allowable expense reduces the profit you pay tax on. For private landlords across Gravesend, Dartford, Medway and the wider Kent area, here is a plain-English guide to what you can claim, what you cannot, and the bits that trip people up.

The golden rule: wholly and exclusively

An expense is allowable if it is incurred wholly and exclusively for the purposes of your property business, and it is a running cost rather than a one-off improvement to the property itself. That second point matters a great deal, and we will come back to it. If a cost has a private element — say a phone you use for both personal calls and managing the let — you can usually claim the business proportion, but not the lot.

The everyday costs you can claim

Most landlords have a fairly predictable set of running costs, and these are the ones to make sure you capture:

• Letting agent and management fees, including tenant-find and renewal fees.
• Repairs and maintenance that keep the property in its existing condition — more on the repairs-versus-improvements line below.
• Insurance — buildings, contents and landlord/rent-guarantee cover.
• Ground rent, service charges and any council tax or utility bills you pay during void periods.
• Accountancy fees for preparing your rental accounts and property pages.
• Legal and professional fees for shorter tenancy work, such as drawing up an assured shorthold tenancy or evicting a defaulting tenant.
• Safety certificates — gas safety checks, electrical inspections and energy performance certificates.
• Advertising for new tenants.
• Cleaning, gardening and general upkeep between tenancies.
• Motoring costs for genuine trips to the property, either as a mileage claim or an apportioned actual cost.

Replacing furniture and appliances

If you let a property furnished or part-furnished, you cannot claim the cost of kitting it out for the first time. What you can claim, under the replacement of domestic items relief, is the cost of replacing moveable items such as sofas, beds, wardrobes, carpets, curtains, white goods and crockery. The relief is limited to a like-for-like replacement, so if you take the chance to upgrade, only the equivalent standard cost qualifies, and you must knock off anything you get for the old item. Fitted items that are part of the building, such as a boiler or a fitted kitchen, are treated as repairs instead.

Mortgage interest: not what it used to be

One of the biggest changes in recent years is how mortgage interest is treated. For individual residential landlords, finance costs — mortgage interest, and the interest element of buy-to-let loans — are no longer a deductible expense. Instead you get a basic-rate tax reduction. This is such an important area, and so widely misunderstood, that we have covered it in its own separate guide. If you have a mortgage on your rental, please do read that one too.

The £1,000 property allowance

If your rental income is modest, there is a simpler option. Instead of adding up actual expenses, you can deduct a flat £1,000 property allowance from your gross rents. You cannot claim both the allowance and your actual costs against the same income, so it is a choice: for most landlords with a mortgage, agent fees and real repair bills, claiming actual expenses will beat the £1,000 comfortably. But for someone letting a lock-up garage or a room with very few costs, the allowance can be the easier and better route.

What you cannot claim

A few costs catch people out. You cannot claim the cost of improving or extending the property (that is capital, and we explain the difference in a separate post). You cannot claim your own time or “wages” for managing the let. Capital repayments on your mortgage are not allowable — only the interest side gets the restricted relief. And the cost of buying the property, along with most of the purchase legal fees and stamp duty, is capital rather than a running expense.

Keep the records — especially now

Whatever you claim, you need the paperwork to back it up. That has become more pressing with Making Tax Digital for Income Tax, which now requires many landlords to keep digital records and report to HMRC quarterly. Good, contemporaneous records are no longer just good practice; for a lot of Kent landlords they are a requirement. A simple spreadsheet or app that logs each cost as it happens will save a scramble later.

How MCC Partners can help

We look after rental accounts and tax returns for landlords right across Kent, from those with a single flat in Gravesend to portfolios spread across Dartford and Medway. We make sure every allowable expense is claimed, nothing is claimed that should not be, and your records are set up to meet the digital reporting rules. Often the value is not in one big deduction but in the handful of smaller costs landlords forget year after year.