Wear and Tear Allowance 2017/2018 for Landlords

Wear and Tear Allowance was abolished from 6 April 2016, so there is no such allowance available for 2017/2018. 

Wear and tear allowance was something that was available to landlords of furnished rental properties.

So from the 5 April 2016 landlords can now claim for the true cost of anything they buy to against their rental profits.

Why Was Wear and Tear Allowance Abolished?

Until 5 April 2016 landlords could claim a flat rate to reflect the general wear on the furnishings of a rental property such as sofas, pots and pans or beds. 

The allowance was available regardless of true spending so obviously, it was in landlords interests to not replace furnishings but claim for the allowance regardless. 

In reverse, if a landlord had a high amount of furnishings to replace on a regular basis, the wear and tear allowance may not sufficiently reflect these costs.

From 6 April 2016 the wear and tear allowance has been abolished and instead landlords are now allowed to claim for the costs of any actual replacements to furnishings that they have paid for.

For example, if a sofa is replaced, a landlord can claim for the actual cost of buying that new sofa.

It is therefore really important that if you are a landlord you keep all the receipts for anything you buy to claim for against your tax bill.

Read More:The Ultimate List of Allowable Expenses for Landlords

How was the Wear and Tear Allowance Calculated?

Wear and Tear Allowance was only available to landlords renting out a furnished property. 

It is a deduction against rental profits and is calculated at 10% of rent less rates (commonly referred to as net rent).

An Example of Wear and Tear Allowance

A landlord rents out a furnished property at £1,200 per month and pays rates of £1,400 for the year. 

Therefore the landlord is able to deduct wear and tear allowance from their rental profits for the year of £1,300.

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant turned entrepreneur who helps the self-employed gain financial confidence when it comes to running the numbers side of their business and filing tax returns with guides, templates and resources on the Go Self-Employed website.