The general rule is that expenses must be “wholly and exclusively” for the purpose of the business. As the company director, you are responsible for ensuring that all expenses reported in the accounts are solely for the purpose of the business.
- Expenses such as insurance, and repairs/maintenance are 100% deductible.
- For mortgage repayments, only the interest element is tax deductible
- For solicitors fees relating to the purchase of the property these will be added to the cost of the property, so no tax relief in the year but a tax deduction when they sell the property
As the shareholder of your company, you can decide what to submit as a business expense. As a rule of thumb, anything you expense to the company must be wholly and exclusively incurred for your property rental business. For more information on and examples of allowed expenses, please have a look at the HMRC website.
When we prepare your company accounts, our accounting team may raise a query with you about specific expenses that may not fit the criteria for what can be expensed (e.g. if there are several high value electronics included). However, if you confirm that you wish for these to be treated as a business expense anyway, we would prepare your accounts on that basis for you.