With the tax return deadline around the corner, most landlords may be starting to wonder what expenses they can claim against rental income.

We have put together a quick guide to some of the common expenses you can deduct from your rental income and reduce your Buy to Let Profit (and of course your tax bill!).

Maintenance and Repairs

Any money you spend keeping your property in good order can be deducted against your rental income.  Things like painting, gardeners, replacing a window or dealing with a burst pipe in the bathroom are all things you need to pay for to maintain your property to keep it in its original condition, so keep all your bills to claim for the cost against the rent you have collected.

Service charge is also allowable against your rental profits. So if, for example, you own a flat and pay an amount for service charge for running the block, keep hold of your service charge demands so you can make your claim.

Look out, you cannot claim for costs which may be classified as Capital Expenses – these are things which improve rather than maintain your property.  For example, an extension or replacing the carpet.


Insurance

Buildings and contents insurance are allowable expenses and can reduce your taxable rental income.  

Mortgage Interest

Until 5 April 2017, you are able set off the interest element of any mortgage payments made against rental income. You should be able to find this figure on your mortgage statement.

Letting Fees

Any costs paid for letting and managing your property are allowable for tax purposes.  So if you paid your agent any fees, keep details of these payments ready for your tax return.

If you chose however to advertise the property yourself to find your own tenants, then these costs are equally allowable as they are a direct cost of letting out your rental property.

Accountants Fees

You can claim for the cost of your accountant preparing your rental accounts.  Wonderful!

Ground Rent

If you pay ground rent on your leasehold property, then you can also claim for this expense against your rental income profits.

Water rates, council tax, gas and electricity

If you take responsibility for any of these items as part of your tenancy agreement, then again you can claim for these expenses as they are direct costs of owning the BTL property.

Travel Costs

Travel costs getting to and from your property to check on it or visiting agents can be claimed.  If you use your car, your helpful  accountant will probably talk you through making a mileage claim for you (this is 45p for the first 10,000 miles and 25p thereafter).

These are some of the common expenses Landlords may pay for. Knowing what expenses are allowable and keeping a track of all the expenses you may incur will help you understand how much profit you make on your Buy to Let property, as well as reduce your income tax bill.