The question every landlord asks: what can I actually claim?
It's one of the most common questions landlords ask, and it's a fair one — the rules aren't always intuitive, and getting it wrong in either direction causes problems. Claim too little and you're paying more tax than you need to. Claim too much, or claim the wrong things, and you're storing up a problem for later. The starting principle is that allowable expenses need to be incurred wholly and exclusively for the purpose of renting out the property. Most of the confusion comes from costs that sit in the middle — partly personal, or partly capital improvement rather than day-to-day running cost.
What's usually claimable
Day-to-day running costs are generally the safest ground: letting agent fees, landlord insurance, ground rent and service charges, accountancy fees for managing the property's tax affairs, and repairs and maintenance that keep the property in its existing condition rather than improving it. Utility bills paid on the tenant's behalf, and the reasonable costs of finding and vetting new tenants — advertising, referencing checks and similar — are usually claimable too.
The mortgage interest question
This is where a lot of individual landlords get caught out, because the rules changed significantly a few years back. Mortgage interest on a residential rental property held personally is no longer deducted directly from rental income before working out your tax bill — instead it's given as a tax credit at a set rate. That's a meaningfully different outcome to how a normal business cost is treated, and it's one of the main reasons landlords ask whether a limited company structure would suit them better, since companies are taxed differently on finance costs.
What generally can't be claimed
Capital improvements — extending the property, adding an extension, or upgrading it well beyond its original condition — usually aren't claimable as a running cost against rental income in the year you spend the money. They typically get factored in later, against any gain when you sell, rather than against annual rental profit. The distinction between a repair (claimable) and an improvement (not, in the same way) trips up a lot of landlords, and it's worth checking before assuming a big piece of work is deductible straight away. Personal use of the property, and costs that would exist whether or not you were letting it out, generally aren't claimable either.
Personal ownership vs. limited company ownership
How your portfolio is structured changes several of these answers. Property held personally is taxed under Income Tax rules, with the mortgage interest treatment described above, and reported through Self Assessment. Property held through a limited company is taxed differently, under Corporation Tax, with its own set of rules around allowable costs and finance charges, and reported through Corporation Tax returns and statutory year-end accounts rather than a personal tax return. Neither structure is automatically better — it depends on your portfolio size, your other income, your growth plans and your appetite for the additional admin that comes with running a company. This is a genuinely individual decision, and one worth discussing properly with an accountant who understands your whole picture rather than working from a general rule of thumb.
What changes at sale — a brief word on Capital Gains Tax
Selling a property you've let out is a separate tax event from the annual rental income you've been declaring, generally falling under Capital Gains Tax rules for personally-held property, or factored into the company's Corporation Tax position for limited company ownership. This is a complex area with its own reliefs, rates and reporting deadlines, and it's genuinely worth planning for in advance of a sale rather than working it out afterwards — the records you kept on capital improvements over the years become directly relevant at this point, which is one more reason good record-keeping pays off long after the work itself is finished.
The records worth keeping as you go
Even a straightforwardly claimable cost isn't much use to you at tax time without something to back it up — a receipt, an invoice, or a bank statement line showing what was paid and when. This matters more for landlords than almost anyone else, because rental expenses tend to be spread across a whole year of smaller costs — a repair here, a service charge there — rather than a handful of big ones, which makes them easy to lose track of without a system behind them. Keep records of: every item of rental income received and when, every expense with supporting documentation, mortgage or finance statements, and anything spent on capital improvements versus repairs, kept separately since they're treated differently for tax. Doing this as you go, rather than gathering it in a rush before a deadline, is what actually lets you claim confidently rather than guessing what you spent eighteen months ago.
Staying compliant beyond the tax return
Tax isn't the only compliance landlords need to think about, though it's the one that touches every property owner regardless of portfolio size. Depending on how your properties are let and structured, there may be VAT considerations, and if you employ anyone directly (a managing agent's staff don't usually count, but direct employees do) payroll obligations too. The common thread across all of it is the same: clean, current records make every one of these obligations simpler to meet, and reconstructing a year's worth of activity from memory at the deadline is where most landlord tax problems actually start.
Where Buzz fits in
We work with landlords with a single buy-to-let and with growing portfolios, personally owned and through limited companies, with pricing that scales with the size of your portfolio rather than a one-size-fits-all package. Have a look at our landlord accounting page for the full detail, or book a free discovery call and we'll talk through your specific portfolio and structure.
