Can I claim the cost of a new kitchen?

It depends on whether it is a repair or an improvement. Replacing a worn-out kitchen with a broadly equivalent one is a repair, and the whole cost is deductible against rental income even if the new units are better made simply because standards have moved on. Extending the kitchen, adding units where none existed, or fitting a substantially higher specification is an improvement, and that portion is capital. Where a job is genuinely mixed, split it and claim the repair element. Keep the itemised invoice rather than a single-line quote, because a lump-sum bill for a kitchen is very hard to defend either way.

Should I use the £1,000 property allowance?

Only if your actual allowable expenses come to less than £1,000, because it is strictly either/or. Take the allowance and you deduct no expenses at all and get no finance cost reducer. Most landlords with a mortgaged buy-to-let are far better off claiming actual costs — in the worked example above, real costs of £3,678 dwarf the allowance. It genuinely helps where property income is small and costs are minimal: renting out a garage, a parking space or a strip of land. If your total property income is £1,000 or less, you do not need to report it at all.

Can I claim for mileage when I visit my property?

Yes, for genuine business journeys — inspections, meeting contractors, dealing with a tenant issue, taking keys. You can use the flat rate of 45p per mile for the first 10,000 business miles in the tax year and 25p per mile after that, or claim an evidenced business proportion of actual vehicle running costs. Pick one basis and stay consistent for that vehicle. Either way you need a log showing the date, the destination, the purpose and the mileage. Ordinary commuting-style visits with a substantially personal purpose attached will not stand up, so record the reason for each trip at the time.

Can I claim expenses from before the property was let?

Often yes. Revenue expenses incurred in the seven years before your property business starts can be treated as if they were incurred on the first day of letting, provided they would have been allowable had the business already been trading. That covers things like insurance, advertising for the first tenant, safety certificates and pre-letting repairs. It does not cover capital costs of buying the property, stamp duty, or improvements made to get it into a lettable state in the first place — those are capital and go against your eventual capital gain instead. Keep every invoice from the pre-letting period.

Will putting the property into a limited company fix the mortgage interest problem?

It removes the restriction, because companies deduct finance costs in full against profits taxed at Corporation Tax rates of 19% up to £50,000 and 25% above £250,000, with marginal relief between. But moving an existing property in is a disposal at market value, so Capital Gains Tax and Stamp Duty Land Tax usually bite immediately, and company buy-to-let mortgage rates are typically higher. You are also taxed again on extraction, at 2026/27 dividend rates of 10.75% and 35.75%. It frequently works for landlords building a geared portfolio for the long term and frequently does not for someone with one low-mortgage property. Model it before you move.

Landlord tax: what you can (and can't) claim

“What can I actually claim?” is the question we're asked most often by landlords, and it's a fair one. The rules aren't intuitive, and getting it wrong in either direction costs you. Claim too little and you pay more tax than you need to. Claim the wrong things and you're storing up a problem for the day HMRC looks. This walks through what's claimable, what isn't, how the mortgage interest rules actually work in figures, and what changes on 6 April 2027.

The general rule

An expense is allowable if it's incurred wholly and exclusively for the purpose of renting out the property. Simple enough in principle. The confusion comes from costs that sit in the middle — partly business and partly personal, or capital improvement dressed up as a repair.

Where a cost is genuinely split, you can usually claim the business proportion, provided you can show how you arrived at it. A phone used for tenants and family is claimable on an evidenced business share; a family holiday with a two-hour property inspection bolted on is not.

What's claimable

Day-to-day running costs are the safest ground:

Letting agent and management fees, including the VAT on them if you're not VAT registered.
Landlord insurance — buildings, contents, rent guarantee, landlord liability.
Ground rent and service charges on a leasehold property.
Accountancy fees for the property's tax affairs.
Repairs and maintenance that restore the property rather than improve it: repainting, fixing a boiler, replacing broken roof tiles, damp treatment.
Safety compliance: gas safety certificates, electrical installation condition reports, smoke and carbon monoxide alarms.
Utilities and council tax where you pay them, including during void periods.
Tenant-finding costs — advertising, referencing, inventory and check-in fees.
Legal and professional fees on lets of a year or less, and on renewals of short leases.
Motoring costs for genuine property visits, either at the flat rate of 45p a mile for the first 10,000 business miles and 25p thereafter, or on an evidenced proportion of actual running costs. Keep a log either way.

Replacement of domestic items relief is worth flagging separately because landlords miss it constantly. You can deduct the cost of replacing furniture, furnishings, appliances and kitchenware in a let dwelling — a sofa, a fridge, carpets, curtains — provided the old item is genuinely no longer available to the tenant. The relief covers a like-for-like replacement plus incidental disposal and installation costs. Upgrading beyond the equivalent is capped at what the nearest modern equivalent would have cost. It does not cover the initial furnishing of a property, and it does not cover fixtures that form part of the building.

What you can't claim

Capital improvements are the big one. Adding an extension, converting a loft, fitting a bathroom where none existed, or upgrading the property well beyond its original standard are capital costs. They don't reduce your rental profit in the year you spend the money; they go into the base cost and reduce any capital gain when you sell. Keep the invoices — most landlords who lose this relief lose it because they can't evidence the spend a decade later.

The repair-or-improvement line is where most disputes arise. Replacing a worn-out kitchen with a similar one is a repair. Replacing it with a substantially better one, or knocking through to double its size, is an improvement. Replacing single-glazed windows with double glazing is generally treated as a repair now, because double glazing is the standard modern equivalent — the same logic that used to make it an improvement now works in your favour.

Also not claimable: the capital element of your mortgage payment (only the interest gets relief, and only as described below), your own time or notional labour, personal use of the property, costs of buying or selling the property such as stamp duty and conveyancing on purchase, and legal fees on the initial grant of a long lease.

The mortgage interest rules, in actual figures

Since 6 April 2020, individual landlords letting residential property get no deduction for finance costs against rental profit. Instead you get a basic rate tax reducer, currently 20% of the finance costs. Mortgage interest, interest on loans to buy furnishings, and arrangement and broker fees all count. This is the change that reshaped buy-to-let economics, and it hits higher-rate taxpayers hardest.

Here's an illustrative example. A higher-rate taxpayer with an employed salary of £60,000 owns one buy-to-let let at £1,200 a month:

Rent received: £14,400
Letting agent fees at 10% plus VAT: £1,728
Landlord insurance: £320
Repairs — boiler service and roof tiles: £1,150
Gas safety certificate and EICR: £180
Accountancy: £300
Mortgage interest paid: £6,600

Allowable running costs total £3,678, so the taxable rental profit is £14,400 less £3,678 = £10,722. As a higher-rate taxpayer that's taxed at 40%: £4,289. The finance cost reducer is 20% of the £6,600 interest, or £1,320. Tax on the rental income is therefore £2,969.

Cash actually left after the mortgage interest and the tax: £14,400 less £3,678 of costs, less £6,600 of interest, less £2,969 of tax = £1,153. On a property generating £14,400 of rent.

Under the pre-2017 rules, with interest fully deductible, the profit would have been £4,122 and the tax £1,649. The restriction costs this landlord £1,320 a year — precisely 20% of the interest, because they're a higher-rate taxpayer. For a basic-rate taxpayer whose rental profit doesn't push them into the higher band, the restriction usually makes no difference at all.

One trap: the reducer is limited to the lowest of 20% of the finance costs, 20% of your property profits, or 20% of your adjusted total income. If your property business makes a loss or a very thin profit, you can't use the full reducer that year — the unused portion carries forward. That's exactly the position highly geared landlords found themselves in as rates rose. We covered this in more depth in our post on Section 24 and mortgage interest relief.

What changes on 6 April 2027

The government is introducing separate tax rates for property income from April 2027: 22% basic, 42% higher and 47% additional, two percentage points above the equivalent main rates. Finance cost relief moves to the new property basic rate of 22% at the same time. The way you report and pay doesn't change — only the rates.

For the landlord above, that means tax on the same £10,722 profit at 42% is £4,503, less a reducer of 22% of £6,600 = £1,452, giving £3,051. About £82 a year more. The rate rise and the more generous reducer largely offset each other for a landlord in that position; a landlord with heavier borrowing relative to profit does slightly better from the change, and one with little or no mortgage does slightly worse. Worth modelling on your own numbers before 2027/28 rather than after.

The £1,000 property allowance

You can claim a flat £1,000 property allowance instead of deducting actual expenses. If your total property income is £1,000 or less you don't need to report it at all. The catch is that it's either/or: take the allowance and you claim no expenses and no finance cost reducer. In the example above, actual costs of £3,678 beat the allowance comfortably. The allowance only helps where income is small and costs are minimal — a lock-up garage, a parking space, or a small amount of land.

Related but separate: the Rent a Room Scheme lets you earn up to £7,500 a year tax-free from letting furnished accommodation in your own home, halved to £3,750 where the income is shared with someone else.

Records, Making Tax Digital, and the 60-day rule

Rental expenses are typically many small costs spread across a year rather than a handful of big ones, which makes them easy to lose. Keep receipts and bank records as you go, and keep capital spend in a separate file so it's still there when you sell.

Two deadlines to have in the diary. First, Making Tax Digital for Income Tax started on 6 April 2026 for anyone with qualifying income — total gross income from self-employment and property before expenses — above £50,000. That means digital records, compatible software and quarterly updates to HMRC. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028, so most landlords with more than one property will be in it within two years. Second, if you sell a UK residential property at a gain you must report and pay the Capital Gains Tax within 60 days of completion, separately from your tax return. Residential rates are 18% within the basic rate band and 24% above it, after the £3,000 annual exempt amount.

Personal ownership or a limited company

How the portfolio is held changes several of these answers. A company deducts mortgage interest in full against profits taxed at Corporation Tax rates — 19% on profits up to £50,000, 25% above £250,000, with marginal relief between — so the Section 24 restriction doesn't apply. That's the reason incorporation gets raised so often.

It isn't a free win. Moving existing property into a company is a disposal at market value, so Capital Gains Tax and Stamp Duty Land Tax generally apply, and buy-to-let mortgage rates for companies are typically higher. You also pay tax again when extracting profit, at 2026/27 dividend rates of 10.75% and 35.75%. Whether it stacks up depends on portfolio size, gearing, your other income and how long you intend to hold — which is why it's a conversation to have with the numbers in front of you rather than a rule to follow.

We work with landlords holding a single buy-to-let and with growing portfolios, personally owned and through companies, and the most valuable thing we do is keep this side clean and correctly categorised as you go rather than reconstructing it at year end. Our landlord accounting page sets out how we work with property owners, the landlord tax guide covers the wider picture, and our Making Tax Digital page explains what the quarterly updates involve. Or just get in touch and we'll talk through your situation.