Landlord expenses: how to track and categorise them properly
Group your landlord expenses into the same categories HMRC uses for property income: rent, rates, insurance and ground rents; repairs and maintenance; non-residential loan interest and finance costs; legal, management and professional fees; costs of services, including wages; other allowable expenses; and residential finance costs, which get a basic-rate tax reduction rather than a deduction [1][2]. Only costs wholly and exclusively for the rental count [1]. Keep receipts, invoices and bank statements for at least 5 years after the 31 January filing deadline [1].
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Landlord expenses are every cost of running your rental business, from boiler repairs to letting agent fees. Getting them right matters twice: it cuts your tax bill legally, and it keeps you on the right side of HMRC if your figures are ever checked. This guide is about the practical side: which categories to use, what records to keep, and a routine that stops receipts piling up.
Landlord expenses categories
The UK property pages of the Self Assessment return (SA105) group expenses into a handful of headings [2]. Making Tax Digital uses the same categories as Self Assessment [3], so if you set your records up this way now, you won't need to change them later.
| Category | Typical landlord expenses |
|---|---|
| Rent, rates, insurance, ground rents | Council tax and water rates you pay, landlord insurance, ground rent, service charges |
| Property repairs and maintenance | Boiler repairs, roof repairs, redecoration between tenants, like-for-like fixtures |
| Loan interest and other financial costs | Non-residential property only; residential finance costs are separate |
| Legal, management and other professional fees | Letting agent fees, accountant's fees, some legal fees |
| Costs of services provided, including wages | Cleaners, gardeners, communal utilities you pay |
| Other allowable property expenses | Advertising, phone calls, stationery, business mileage |
| Residential property finance costs | Mortgage interest on residential lets: basic-rate tax reduction |
Sources: HMRC [1][2]. For what is and isn't allowable within each, see allowable expenses for landlords.
What records to keep for landlord expenses
HMRC says the records you should keep could include rent books, receipts, invoices, bank statements and mileage logs for journeys solely for the property business [1]. You must also keep income from fully furnished lettings separate from unfurnished or part-furnished [1].
Records must be accurate, complete and readable, and kept for at least 5 years after the 31 January deadline for that tax year. HMRC can charge a penalty if they're not [1].
One business, many properties
If you let more than one UK property, HMRC treats them as one property business: income and expenses are added together and losses on one property offset profits on another [1]. Overseas property is kept separate [1]. You don't have to report expenses property by property, but tracking them that way tells you which lets are actually making money.
A monthly landlord expenses routine
- Pick one place for receipts. A folder, an app, or your landlord software. Snap paper receipts the day you get them.
- Use a separate bank account for rent and property costs. It makes the statements your main record.
- Once a month, categorise. Match each payment to a category and a property.
- Flag capital items. Improvements aren't deductible against rent, but keep them for Capital Gains Tax [1].
- Note mixed costs. If something is part personal, record only the business share [1].
- Check MTD dates. If you're in scope, quarterly updates are due 7 August, 7 November, 7 February and 7 May [3].
Landlord expenses spreadsheet: what columns to use
If you're not in MTD yet, a spreadsheet is fine. Useful columns:
- Date
- Property
- Supplier
- Description
- Category (from the table above)
- Amount
- Paid from (account)
- Receipt saved? (yes/no and where)
- Capital or revenue
If MTD applies to you, you'll need bridging software to send spreadsheet figures to HMRC, or move to compatible software [4].
Where landlord expenses go missing
The usual culprit is repairs. A tradesperson sends an invoice by text, you pay by bank transfer, and six months later nobody can find the invoice or remember which property it was for. Small jobs are the worst, because they feel too minor to file.
Gaffy fixes that part. Each repair starts as a report from your tenant through the property's repair link, with photos. It sits in your maintenance inbox with its status and outcome, and you log what it cost against that property. Store the invoice in the property's vault and it's all in one place at tax time. Gaffy isn't accounting software, but it keeps the repair line clean. £12 a month for up to 5 properties, first month free.
Landlord expenses checklist by category
Use this as a prompt when you review a year's spending. Whether each item is allowable depends on the facts; see allowable expenses for landlords.
- Rates and insurance: council tax and water rates in void periods or where included in rent; landlord buildings, contents and liability insurance [1].
- Repairs: boiler call-outs, plumbing, roofing, redecoration between tenants, like-for-like fixture replacements [1].
- Professional fees: letting agent or management fees, accountant's fees, some legal fees [1].
- Services: cleaning of communal areas, gardening, utilities you provide [1].
- Other: advertising for tenants, phone calls and stationery for the rental business, business mileage [1].
- Replacement items: replacing furniture or appliances may qualify for replacement of domestic items relief [1].
- Finance: residential mortgage interest is handled as a basic-rate tax reduction [1].
Common landlord expense mistakes
- Claiming the whole mortgage payment rather than handling only the interest [1].
- Treating an improvement as a repair [1].
- Losing small invoices, which add up over a year.
- Mixing personal and property spending in one account.
People also ask
What expenses can landlords claim in the UK?
Costs wholly and exclusively for the rental business, such as repairs, insurance, agent fees and accountant's fees [1]. See our allowable expenses guide.
How should landlords keep track of expenses?
Keep receipts, invoices and bank statements, categorise each cost monthly, and keep records for 5 years after the filing deadline [1].
Do landlords need receipts for expenses?
Yes. HMRC expects accurate records, including receipts and invoices [1]. Under MTD, HMRC gets totals but you still need the evidence [3].
Can I offset expenses from one property against another?
Yes. UK properties are treated as one business, so losses on one offset profits on another [1].
Try Gaffy free for a month · MTD for landlords
FAQ
Does Gaffy track all my expenses?
No, only repair costs you log against each property. Use a spreadsheet or accounting software for everything else.
Can I store invoices in Gaffy?
Yes, in each property's document vault.
Sources
- HMRC, Work out your rental income when you let property (ww.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income)
- HMRC, Self Assessment: UK property (SA105) (ww.gov.uk/government/publications/self-assessment-uk-property-sa105)
- HMRC, Use Making Tax Digital for Income Tax: send quarterly updates (ww.gov.uk/guidance/use-making-tax-digital-for-income-tax/send-quarterly-updates)
- HMRC, Find software that's compatible with Making Tax Digital for Income Tax (ww.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-income-tax)