Expenses you can set-off against rental income

The expenses you claim against your property income will need to follow the usual HMRC ruling that the costs must be incurred wholly and exclusively for the purpose of renting out the property.

An example set out on the Gov.uk website illustrates the point:

If you buy a new vacuum cleaner for your own home, and also use it to clean your rental property between tenants, you can’t claim the cost of the vacuum cleaner as an expense against your rental income.

However, you could claim the cost of any cleaning products you bought specifically for cleaning the rental property.

Where costs are incurred partly for your rental business and partly for some other purpose you may be able to claim a proportion of that cost if that part can be separately identified as being incurred wholly and exclusively for the purposes of the property rental business.

Expenses you can and can’t claim are summarised below.

Expenses you can claim include:

  • Mortgage interest – a proportion of this cost is now limited to basic rate Income Tax relief,
  • General maintenance and repairs to the property, but not improvements (such as replacing a laminate kitchen worktop with a granite worktop)
  • Water rates, council tax, gas and electricity
  • Insurance, such as landlords’ policies for buildings, contents and public liability
  • Costs of services, including the wages of gardeners and cleaners
  • Letting agent fees and management fees
  • Legal fees for lets of a year or less, or for renewing a lease for less than 50 years
  • Accountant’s fees
  • Rents (if you’re sub-letting), ground rents and service charges
  • Direct costs such as phone calls, stationery and advertising for new tenants
  • Vehicle running costs (only the proportion used for your rental business) including mileage rate deductions for business motoring costs

Expenses you can’t claim a deduction for include:

  • The full amount of your mortgage payment – only the interest element of your mortgage payment can be offset against your income,
  • Private telephone calls – you can only claim for the cost of calls relating to your property rental business,
  • Clothing – for example if you bought a suit to wear to a meeting relating to your property rental business, you can’t claim for the cost as wearing the suit is partly for your rental business and partly to keep you warm – no identifiable part is for your property rental business,
  • Personal expenses – you can’t claim for any expense that was not incurred solely for your property rental business.

Share:

Share on facebook
Share on twitter
Share on pinterest
Share on linkedin
Accounting in Sheffield and Doncaster Certificates

Recently Added News

Related News

Government financial support extended

Government financial support for UK businesses affected by the COVID pandemic have been extended in the past week. Thankfully, relief for employees of affected companies

Quick Links

Online References...
Client Testimonials
Meet the Team

Sheffield Office:
2 President Buildings,
Savile Street East,
Sheffield ,
South Yorkshire,
S4 7UQ

Telephone:
0114 272 0306
Fax:
0114 272 6158
email:
sheffield@roystonparkin.co.uk

Opening Hours:

Mon-Wed: 8.30am – 5pm
Thursday: 8.30am – 7pm
Friday: 8.30am – 2pm

Doncaster Office:
3 Railway Court,
Ten Pound Walk,
Doncaster,
South Yorkshire,
DN4 5FB

Telephone:
01302 320444 / 304440
Fax:
01302 342604
email:
doncaster@roystonparkin.co.uk

Opening Hours:

Mon-Thurs: 9am – 5pm
Friday: 9am – 4.30pm