Costs of services provided, including wages (property)
for landlords

Costs of services provided, including wages, is box 28 on the UK property pages. It covers services you provide to tenants: cleaning, gardening, communal hot water and heating, and the wages of people you employ to provide them. If you charge tenants for the services, the charges are property income.

What goes in this category

• Cleaning of let property and communal areas.
• Gardening and grounds maintenance.
• Communal hot water, heating and lighting.
• Wages of cleaners, gardeners, caretakers and other staff you employ.

What does not

• Services provided for your own home.
• Repairs, which go in box 25.
• Agent management fees, which go in box 27.
• Your own time, which is not an expense.

Items in this category

What counts as a service

A service is something you provide to tenants beyond the bare property, such as cleaning, gardening or heating shared areas. It is common in houses in multiple occupation, serviced accommodation and blocks of flats where the landlord manages communal areas.

Income for services

If you charge tenants separately for services, or the rent includes them, the charges are part of your property income. The costs go here. This is different from a service charge you pay to a freeholder, which goes in box 24.

Employing people

If you employ a cleaner, caretaker or gardener, their wages go here, with employer's National Insurance and pension contributions. You register as an employer and run payroll. If they are self-employed contractors, their invoices go here too.

Family members

Paying a family member for real work, such as cleaning between tenants, is allowable at a commercial rate. HMRC's manual allows pay that reflects the work, and disallows the part that does not. Keep timesheets and pay the money into their own account.

Your own time

Your own work on the property, such as cleaning or gardening yourself, is not an expense: you cannot pay yourself. Materials you buy for the work are allowable.

Bills included in rent

If rent includes utilities, broadband or Council Tax, the landlord's bills are allowable. Utilities for communal areas go here; bills for whole properties may fit better in box 24. Be consistent.

Serviced accommodation

Short-term and serviced lets often have high service costs: cleaning and linen changes between guests, consumables and management. These are allowable, and since April 2025 these lets are taxed under the residential rules.

One total if income is under £90,000

If your total property income before expenses is below £90,000, the SA105 notes let you add up your expenses, excluding residential finance costs, and put the total in box 29 instead of splitting them between boxes 24 to 29. You still need the underlying records, and the costs that belong in box 28 are still only those allowable under the same rules. Making Tax Digital quarterly updates follow the same £90,000 threshold for a single expenses figure.

Linen, consumables and supplies

In furnished and serviced lets, bed linen, towels, toiletries, cleaning products and similar consumables you supply to tenants or guests are running costs. GOV.UK treats low-value items that need replacing almost every year, such as linen and crockery, as allowable when replaced.

Communal areas in blocks

If you own a block and let the flats, cleaning, lighting, lift maintenance and door entry systems for the communal areas are services to tenants. Repairs to those areas go in box 25. Capital works, such as installing a lift, are not allowable against rent.

Concierge, security and waste

Concierge, security patrols, pest control contracts and bulky waste collection that you arrange for tenants are services, allowable here. If they are provided by a freeholder and recharged through a service charge you pay, they go in box 24 instead. Either way they are allowable; only the box differs, and the choice has no effect on the tax you pay.

Records to keep

Keep invoices from contractors, payroll records for employees, and utility bills for communal areas. Keep the tenancy agreements showing which services are included.

Worked example: a house in multiple occupation

A landlord with an HMO pays a cleaner £2,600 a year for communal areas, a gardener £900, and £1,400 for communal heating and lighting. Box 28 is £4,900. Utilities for the tenants' rooms, included in the rent, go in box 24.

Four questions before a cost goes here

1. Was it for the letting, and only for it? A cost must be incurred wholly and exclusively for the property business. A cost with a personal purpose that cannot be separated is not allowable at all.
2. Is part of it personal? Where a business part can be identified, such as business miles or business calls, claim that part on a reasonable basis and leave the rest out.
3. Is it a running cost or something you keep? Running costs belong in the expense categories. Buying or improving the property is capital and never goes here, though replacing domestic items has its own relief.
4. Is there a specific rule? Some costs are disallowed whatever their purpose, such as fines and client entertaining, and some have their own treatment, such as residential finance costs, which give a 20% tax reduction instead of a deduction.

Jointly owned property

If you own a let property with someone else, each owner reports their share of the rental income and expenses. Married couples and civil partners who live together are usually taxed on equal shares; if you own the property in unequal shares and are entitled to the income in the same shares, you can be taxed on that basis once you declare your beneficial interests to HMRC. Owners who are not married or in a civil partnership usually split profits by their share of the property, unless they agree a different allocation.

Property allowance or expenses

Instead of deducting expenses, a landlord can claim the £1,000 property allowance, which is simply taken off rental income. You cannot claim both for the same income, so the allowance only helps if your allowable expenses are less than £1,000. If your gross property income is £1,000 or less, the allowance covers it and you may not need to report it. Either way, keep records of what you spent, so you can tell which gives the lower profit.

This category in Making Tax Digital

Under Making Tax Digital for Income Tax, a landlord's quarterly update carries the same property expense categories as the UK property pages of the return, so this category is one line of each update. Landlords with property income only, or with property and trading income together over £50,000, join from 6 April 2026, falling to £30,000 from April 2027 and £20,000 from April 2028. If your property income is under £90,000 you can send a single consolidated expenses figure instead of the categories, but you still need the underlying records.

Cash basis or traditional accounting

The cash basis, the default for sole traders and landlords since 2024/25, counts a cost in the tax year you pay it. Traditional (accruals) accounting counts it when you incur it, whenever you pay, and treats things you buy to keep as capital, relieved through capital allowances. For most costs in this category the only difference is timing; for anything you buy to keep, the basis decides whether it is an expense at all.

Residential finance costs are different

Since 6 April 2020, mortgage interest and other finance costs on residential lets are not deducted from rental income at all. Instead, you get a tax reduction of 20% of those costs, which is worth the same as a deduction to a basic-rate taxpayer and less to a higher-rate one. Finance costs for commercial and other non-residential lets are still deducted in full. That is why the property pages have a separate box (44) for residential finance costs.

How much an allowable cost saves

Landlords pay Income Tax on rental profit but no Class 4 National Insurance, so each pound of allowable expense saves 20p at the basic rate, 40p at the higher rate and 45p at the additional rate. Residential finance costs are the exception: they give a flat 20% tax reduction instead of a deduction.

What £1,000 of allowable expense saves a sole trader in 2026/27

• Basic rate (20% + 6%)£260
• Higher rate (40% + 2%)£420
• Additional rate (45% + 2%)£470
• Allowance taper band (60% + 2%)£620

Records to keep

Keep the invoice or receipt for every cost in this category, with a note of the business purpose wherever it is not obvious, and how you worked out the business share of anything also used privately. From 6 April 2026, sole traders and landlords with qualifying income over £50,000 keep digital records and send quarterly updates under Making Tax Digital, falling to £30,000 from April 2027 and £20,000 from April 2028.

Common mistakes

• Claiming the value of your own time.
• Putting repairs here.
• Not declaring service charges received as income.

Every other category

The other 7 categories on the UK property pages, in box order:

• Rent, rates, insurance and ground rents (property), SA105 box 24
• Property repairs and maintenance, SA105 box 25
• Non-residential property finance costs, SA105 box 26
• Legal, management and other professional fees (property), SA105 box 27
• Other allowable property expenses, SA105 box 29
• Travel costs (property), SA105 box 29
• Residential property finance costs, SA105 box 44

The A to Z of expenses lists every item and all 23 categories: the 15 self-employment categories and the 8 for UK property.