The Definitive Guide to Landlord Expenses
It's not what you earn, it's what you keep. Our definitive checklist for the 2025/26 tax year ensures you claim every penny you are entitled to without triggering an audit.
The Latch Team
Editorial
If there is one rule in property investment, it is this: It’s not what you earn, it’s what you keep.
You might have a rental income of £20,000, but if you pay tax on the full amount because you forgot to claim your valid expenses, you are literally throwing money away.
However, the rules for what you can and cannot claim are strict. HMRC draws a hard line between "Repairs" (allowable) and "Improvements" (not allowable).
Here is your checklist for the 2025/26 tax year to ensure you are claiming every penny you are entitled to—without triggering an audit.
1. The Golden Rule: "Wholly and Exclusively"
For an expense to be deductible, it must be incurred wholly and exclusively for the purpose of renting out the property.
Allowable
A train ticket to visit the property for an inspection.
Not Allowable
A train ticket to visit the property and see your mum who lives next door.
2. Revenue vs. Capital (The "Repair" Trap)
This is where most landlords get caught out.
Revenue Expenses (Allowable Now)
Restoring a property to its original condition.
Capital Expenses (Not Allowable Now)
Adding value or improving the property. These cannot be deducted from your annual rent. Instead, you save them to reduce your Capital Gains Tax when you eventually sell.
3. The "Replacement of Domestic Items" Relief
The old "Wear and Tear Allowance" (where you could deduct 10% of rent automatically) is long gone. Now, you can only claim tax relief when you actually spend money to replace an item.
What Qualifies?
- Movable furniture (beds, sofas, wardrobes).
- Appliances (fridges, washing machines).
- Kitchenware (crockery, cutlery).
The Catch
It must be a replacement, not an initial purchase.
- Buying the first sofa for a flat? No tax relief.
- Replacing an old broken sofa? 100% tax relief.
4. Professional Fees & Services
You can deduct almost any cost involved in the professional management of the property.
- Letting Agent Fees:
Tenant find fees, management commissions. - Insurance:
Landlord insurance, public liability, rent guarantee. - Software:
Your subscription to Latch is a 100% tax-deductible business expense. - Legal Fees:
For evictions or lease renewals (but not for buying the property).
5. Travel & Office Costs
Mileage
If you drive to your rental property for inspections or maintenance, you can claim 45p per mile (for the first 10,000 miles). Log every trip in Latch so you don't forget.
Home Office
If you run your portfolio from home, you can claim a flat rate (e.g., £10–£26 per month depending on hours worked) or a calculated portion of your household bills.
6. The Mortgage Interest Rule (Section 24)
Since 2020, you cannot deduct mortgage interest from your rental income to lower your profit. Instead, you receive a 20% Tax Credit on your interest payments.
Note: If you own properties via a Limited Company, this rule does not apply (interest is still fully deductible).
7. How to "Audit-Proof" Your Portfolio
HMRC can investigate your tax returns up to 6 years later. If they ask for proof of a £500 repair and you can’t find the receipt, they will disallow it and fine you.
The Old Way
Stuffing receipts into a shoebox and hoping the ink doesn't fade.
The Latch Way
- Snap:Take a photo of the receipt the moment you buy a paintbrush or boiler part.
- Upload:Tag it to the specific property in your Latch dashboard.
- Forget:We store the digital copy forever. When tax time comes, you export a single PDF summary.
Ready to automate your expenses?
Stop stuffing receipts into shoe boxes. Latch helps you track every penny, automate your bookkeeping, and ensure you never miss a deductible expense again.
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Get Started FreeDisclaimer: Our guide is for educational purposes only, as we don’t provide tax advice. We always recommend consulting experts (in this case your accountant or tax advisor) when dealing with rules and regulations.
