Making Tax Digital · Landlords
Replacement of domestic items relief for property landlords
ONLY£15A MONTHReplacing a broken fridge or worn sofa in a rental property is different from furnishing a property for the first time.
Replacing a broken fridge or worn sofa in a rental property is different from furnishing a property for the first time. Replacement of domestic items relief can cover qualifying replacements, but the conditions and calculation matter, particularly where the new item is an upgrade.
Check that it is a replacement
HMRC's property guidance covers furniture, furnishings, appliances and kitchenware provided for tenant use. The old item must no longer be available for the tenant's use, and other conditions apply.
Initial furnishing is not covered by this relief. Nor can you claim the same expenditure through capital allowances and replacement relief. A fixture such as a bath may instead fall under the building-repair rules.
Separate an upgrade from a modern equivalent
A reasonable modern equivalent can qualify even where technology or efficiency has improved. An enhanced specification or different function can limit the deduction to the equivalent replacement cost.
Add eligible incidental purchase or disposal costs and deduct proceeds received for the old item. Keep evidence of the replacement and the equivalent-cost figure rather than simply using the total shown on the new invoice.
Worked example: replacing an appliance
An equivalent replacement fridge costs £600. The landlord chooses a £1,500 upgraded model, pays £40 delivery and receives £50 for the old fridge. Assuming the conditions and incidental costs qualify, the calculation is £600 + £40 − £50 = £590.
If the £600 model is itself a reasonable modern equivalent, that is not disqualified merely because it is more energy efficient. The £900 discretionary upgrade is the part excluded in this illustration.
Keep the property business and the property detail clear
UK rental properties are generally brought together in one UK property business for Income Tax. Foreign property belongs in a separate business. A property reference remains useful for management and evidence, even though a separate quarterly submission is not normally required for every UK address.
HMRC's rental-income guidance explains the basic income and expense rules. For joint ownership, establish the share taxable on you before allocating receipts and expenses. The person whose account receives the money is not necessarily the person taxable on all of it.
Keep revenue costs, capital projects and residential finance costs identifiable. A mortgage payment can include a capital repayment and interest. Neither should be treated as an ordinary repair merely because it appears among the property's monthly outgoings.
For shared bills, use a reasonable allocation and retain the calculation. Do not claim the full same expense against several properties or owners. A property-level schedule should add back to the business totals and to the supporting statements. Those connections make it easier to answer a question about one address without losing sight of the portfolio as a whole.
Keep the evidence connected to the figures
Your digital record should explain the amount, date and nature of the transaction. Keep the invoice, receipt, statement or other evidence that supports it. A photograph can make a paper document easier to retain, but a folder of photographs alone does not create complete transaction records.
For sole traders, HMRC normally requires business records to be kept for at least five years after the relevant 31 January filing deadline. Keep them longer where the rules for a late return, enquiry or other circumstances require it. Check the record-retention guidance.
Make the records usable by your future self. Include a short explanation where a bank description is vague, retain the calculation behind a business-use split and make corrections traceable. For a missing receipt, try the supplier account, email confirmation or a replacement invoice before relying on incomplete evidence.
At review time, compare your records with the bank or payment account and investigate differences. Equal totals are useful, but two errors can cancel each other out. A sample of individual transactions can reveal a duplicated purchase or an omitted customer receipt that a totals-only check misses.
Where this fits into Making Tax Digital
For 2026/27, the first mandatory phase generally covers individuals whose combined qualifying self-employment and property income was more than £50,000 in 2024/25, subject to exemptions. Qualifying income normally means income before expenses. It is a different figure from taxable profit. Check the qualifying-income rules.
Once within MTD, keep the required digital records and send quarterly summaries for each relevant business. The summaries are cumulative from the start of the reporting year. They do not contain your entire personal tax position, and sending one does not itself create a quarterly tax-payment demand.
HMRC does not require accounting or tax adjustments before each quarterly update. Those adjustments and the other information needed for the annual return still have to be completed at the appropriate stage. Keep a review list so a matter deferred until year end is not forgotten. Read HMRC's quarterly-update guidance.
Software can organise the information, but the business facts remain essential. Review the figures you approve rather than assuming that a successful import has also settled every tax question.
Keep a property replacement schedule
Record the address, old item, replacement date, new item, equivalent cost and disposal proceeds. Keep the invoice and explanation together. Do not automatically categorise every furniture-shop payment as a repair or every expensive replacement as fully deductible.
Take the next step
Avona.app offers a self-service route from £15/month. Bring your records together, review the figures and choose a workflow that fits your business. For professional help, discuss the scope and total price of Avona Concierge, managed by chartered accountants, before choosing a service.