Allowable expenses
Running costs you can deduct from rental income.
3 min read · Updated 2 August 2026
Overview
Allowable expenses are costs incurred wholly and exclusively for running the rental business that a landlord can deduct from rental income before calculating profit for tax. They include letting agent fees, maintenance and repairs, insurance, council tax and utility bills paid by the landlord, and the replacement of domestic items (the replacement relief). Capital improvements are not allowable.
Legal requirements
- Only deduct expenses wholly and exclusively for the rental business.
- Keep receipts and records for at least five years after the 31 January submission deadline.
- Use replacement relief for furnished items, not a wear-and-tear allowance.
Common mistakes
- Claiming capital improvements as repairs.
- Claiming costs that had a dual private purpose.
Frequently asked questions
Can I deduct the cost of a new kitchen?
No — a new kitchen is a capital improvement, not a repair. You can deduct repairs and maintenance, but not improvements that add value.
Related terms
This wiki entry is general information for UK landlords and letting agents, not legal advice. Rules differ across England, Wales, Scotland and Northern Ireland — check your local requirements or take advice before acting.