What expenses can you claim against rental income?

Allowable expenses

You can deduct certain expenses from your rental income to reduce your tax bill. HMRC allows the following categories:

• Repairs and maintenance — Fixing broken items, repainting, plumbing repairs (but not improvements)
• Insurance — Landlord insurance, buildings insurance, contents insurance for furnished lets
• Management fees — Letting agent fees, property management charges
• Professional fees — Accountant fees, legal costs for tenancy agreements (not purchase costs)
• Utilities — Only if you pay them (e.g. for HMOs where bills are included in rent)
• Ground rent and service charges — For leasehold properties
• Travel costs — Travel to your property for management purposes (not commuting)

Finance costs

Mortgage interest is no longer deductible directly. Instead, you receive a 20% tax credit on finance costs. Tendmere calculates this correctly in your SA105 report.

Capital vs revenue expenses

Improvements (new kitchen, extension) are capital expenses and cannot be claimed against rental income — but may reduce Capital Gains Tax when you sell. Repairs (replacing a broken boiler with a like-for-like) are revenue expenses and can be claimed.