WHAT EXPENSES CAN I CLAIM TO WORK OUT MY RENTAL INCOME?
Common types of expenses which can be deducted from your rental income (provided you pay for them yourself) are:
- general maintenance and repairs to the property, but not improvements (such as building an extension or replacing a feature of the property with a much superior product)
- Water rates, council tax, gas and electricity
- Insurance, such as landlords’ policies for buildings, contents and public liability
- Costs of services, including the gardeners and cleaners’ wages
- Management and letting fees
- Legal fees for lets of a year or less, or for renewing a lease for less than 50 years
- Accountant’s fees
- Ground rents (if you’re sub-letting) and service charges
- Other direct costs such as phone calls, stationery and advertising for new tenants
- Vehicle running costs (only the proportion used for your rental business) for example business mileage.
- Finally you can claim as an expense the interest on a mortgage you might have arranged to buy the property. This can be quite substantial but there have been important changes to the legislation with regards to the tax relief available to residential landlords who pay tax at 40%.
(Please see our blog “Changes to tax relief for residential landlords – Who is affected?”)
For more information please call us on 020 88575781