Most letting agent fees go in "Legal, management and other professional fees". HMRC's notes for the property pages of the tax return list "management fees paid to an agent for rent collection, advertising and administration" there. Making Tax Digital (MTD) for Income Tax uses the same categories as Self Assessment.
Other lines on a statement go elsewhere, and a few aren't spelled out by HMRC at all.
Do you need to categorise at all?
Possibly not in full. GOV.UK allows simpler records if your total UK property turnover is under £90,000. For residential property you record whether each item is income or an expense, and whether an expense is a restricted finance cost (such as mortgage interest). At £90,000 or more you categorise everything in full, and GOV.UK suggests categorising in full if you're not sure you'll stay under.
Either way, you still need to know which costs are allowable.
Line by line
The category names below are HMRC's, as used for UK property in Self Assessment and MTD.
| Statement line | Usual category | How clear-cut |
|---|---|---|
| Management fee or commission | Legal, management and other professional fees | Named by HMRC |
| Tenant-find or letting fee | Legal, management and other professional fees | See first lets, below |
| Tenancy renewal fee | Legal, management and other professional fees | Named for leases under 50 years |
| Inventory, check-in or check-out | Legal, management and other professional fees | Not named; it's an agent fee |
| Deposit registration fee | Legal, management and other professional fees, or Other allowable property expenses | Not named |
| Gas safety check, electrical report (EICR) | Property repairs and maintenance, or Other allowable property expenses | Not named |
| Energy Performance Certificate (EPC) | Unclear | Not named; check |
| Repair arranged by the agent | Property repairs and maintenance | Named |
| Ground rent, service charge | Rent, rates, insurance, ground rents and other costs | Ground rent named; service charge allowable but its box isn't named |
| Landlord or rent guarantee insurance | Rent, rates, insurance, ground rents and other costs | Named |
| Council tax or utilities you pay | Rent, rates, insurance, ground rents and other costs | Council tax and water rates named; gas and electricity allowable but their box isn't named |
| Cleaning or gardening for tenants | Cost of services provided, including wages | Named |
| New kitchen, extension, other improvement | None: capital, not allowable | Named |
The lines that need more thought
Tenant-find fees and first lets. GOV.UK lists letting agent fees and advertising for new tenants as allowable. But HMRC's notes say you can't claim "any costs for the first letting or subletting of a property for more than a year", and its manual includes agent's fees and commission in that. Lets of a year or less are fine. A new tenant who replaces an old one on broadly similar terms doesn't normally make the costs disallowable. If it's the property's first let and the tenancy is longer than a year, ask an accountant.
Renewal fees. Fees for renewing a lease of less than 50 years are claimable. Costs of agreeing a premium on renewal aren't.
Inventory, check-in and deposit registration. HMRC doesn't name these. Inventory and check-in fees are agent charges for running the let, so they sit with other agent fees. A deposit registration fee could go there or under other allowable property expenses. HMRC doesn't say which.
Safety certificates. GOV.UK's general rule is that you can deduct expenses incurred wholly and exclusively for renting out the property. Neither GOV.UK nor HMRC's notes say which category gas safety checks, electrical reports or EPCs belong in. Repairs and maintenance or other allowable property expenses are the candidates. EPCs are the least clear, so check with an accountant. If an inspection leads to work, judge that work as a repair or an improvement on its own merits.
Repairs arranged by the agent. The contractor's invoice is a repair if it restores something to its original condition. HMRC's examples include painting, damp treatment, roof repairs and fixing appliances supplied with the property. Like-for-like replacement is normally a repair, and so is a modern equivalent that does the same job, such as double glazing replacing single glazing. A significant improvement is capital. If the agent adds its own fee for arranging the work, that usually goes with its other fees.
Service charges. GOV.UK lists ground rents and service charges as allowable. If a service charge bill includes a contribution to major works or a reserve fund, ask an accountant how to treat it.
Improvements. HMRC's notes say not to include the cost of improving or altering a property, or buying furniture or equipment. These are capital costs. Replacing a domestic item like a fridge or a carpet has its own relief, which goes in a separate box on the tax return rather than these categories.
VAT on agent fees if you're not VAT registered
If you aren't registered for VAT, you can't reclaim the VAT an agent charges. HMRC's Business Income Manual says irrecoverable VAT is part of the deductible cost, and its Property Income Manual says property profits follow the same principles as a trade. So a £120 fee plus £24 VAT is recorded as £144. VAT on a capital cost counts as part of that capital cost, not as an expense.
Worked example
The first month of a new 12-month tenancy, with a replacement tenant:
| Line on the statement | Amount |
|---|---|
| Rent received | £1,000.00 |
| Tenant-find fee (£500 + VAT) | −£600.00 |
| Inventory and check-in (£125 + VAT) | −£150.00 |
| Deposit registration (£25 + VAT) | −£30.00 |
| Management fee (10% + VAT) | −£120.00 |
| Gas safety check | −£72.00 |
| Paid to you | £28.00 |
| HMRC category | Lines | Total |
|---|---|---|
| Total rents from property | Rent | £1,000.00 |
| Legal, management and other professional fees | Tenant-find, inventory, deposit registration, management | £900.00 |
| Property repairs and maintenance | Gas safety check | £72.00 |
Check: £1,000 − £900 − £72 = £28, which matches the payout. If you put the deposit registration fee or gas safety check under other allowable property expenses, the totals shift but still reconcile.
FAQ
Does the category matter if my total expenses are the same? At £90,000 or more of UK property turnover, yes: you have to categorise in full. Below that, residential landlords can use simpler records. Either way, whether a cost is allowable at all matters more than which allowable box it's in.
Can I claim back the VAT my agent charges? Only if you're registered for VAT. If you aren't, the VAT is part of the expense.
Sorting a statement into categories
statement-split reads a letting agent statement (PDF or photo). An AI model labels each line, then fixed published rules suggest the HMRC category. Lines HMRC doesn't spell out, like safety certificates and possible improvements, are highlighted for you to decide. You check every line. It isn't tax advice and doesn't send anything to HMRC. Try one statement free.
Sources (checked 18 October 2026)
- GOV.UK: UK property notes (SA105), 2026
- GOV.UK: Work out your rental income when you let property
- GOV.UK: Use Making Tax Digital for Income Tax: create digital records
- HMRC: PIM2120 Legal and professional costs
- HMRC: PIM2030 Repairs: is it capital?
- HMRC: PIM1103 Use of trading income rules
- HMRC: BIM31520 VAT: input tax
- HMRC: BIM31535 VAT: trader exempt or not taxable
This isn't tax advice. Check GOV.UK or an accountant for your situation.