One of the most effective ways to reduce your Airbnb tax bill is to claim every legitimate business expense. Allowable costs are deducted from your rental income before tax is calculated, so every pound you legitimately claim saves you tax at your marginal rate.
The Basic Rule
You can claim expenses incurred wholly and exclusively for the purposes of your rental business. For costs with a personal element, claim the business proportion. Keep records — bank statements, invoices, and digital receipts all work. HMRC guidance on records is at gov.uk/self-employed-records.
Cleaning and Housekeeping
- Professional cleaning fees between guest stays
- Cleaning products if you clean yourself
- Laundry costs — washing and drying linen and towels
- Ironing or linen hire service if used
Guest Consumables
- Toiletries (shampoo, conditioner, soap, shower gel)
- Tea, coffee, milk, and welcome basket items
- Toilet paper, kitchen roll, and similar
- Dishwasher tablets and washing up liquid
Platform and Transaction Fees
- Airbnb host service fees
- Payment processing fees if you take direct bookings
- Other platform fees (Booking.com, VRBO, Sykes)
Property Repairs and Maintenance
Repairs to keep the property in its existing condition are fully deductible as revenue expenses:
- Fixing plumbing, electrics, or boiler
- Repainting walls
- Replacing broken furniture or appliances on a like-for-like basis
- Gardening and outdoor maintenance
Improvements — adding something new or upgrading to something better — are capital expenditure and treated differently for tax.
Furniture and Furnishings
You can claim Replacement of Domestic Items Relief when you replace furniture, furnishings, or appliances in your rental property, covering the like-for-like replacement cost. New items for a new property are capital expenditure under the Annual Investment Allowance.
Insurance
- Buildings insurance
- Contents insurance
- Short-term let or Airbnb host liability insurance
Utilities and Services
If you pay utilities for the property — gas, electricity, water, broadband, TV licence — these are deductible. If guests pay their own bills, you cannot claim those.
Mortgage Interest
Individual landlords receive a 20% tax credit on mortgage interest costs rather than a full deduction. For higher-rate taxpayers, this significantly affects after-tax returns. HMRC guidance on the restriction is within the Rent a Room scheme guidance and broader property income rules.
Management and Professional Fees
- Property management fees if you use an agent
- Accountancy fees
- Legal fees related to letting agreements
Travel
If you travel to the property for inspections, guest check-ins, or maintenance, that travel is deductible. For car journeys: 45p per mile for the first 10,000 business miles. Keep a mileage log — apps like MileIQ make this straightforward.
Getting It Right
Short-term letting expenses are more nuanced than standard buy-to-let, particularly around capital vs revenue expenditure and the mortgage interest restriction.
Read our guide to tax for Airbnb hosts UK or visit our accountant for Airbnb hosts page. Book a free discovery call to talk through your situation.