Mileage Allowance
Quick answer
A simplified way to claim the cost of driving for your lettings business: 45p per mile for the first 10,000 business miles in a tax year and 25p per mile after that. You claim either mileage OR the actual running costs of the vehicle, not both, and you must keep a log of business journeys (inspections, repairs, viewings).
At a glance
- Rate
- 45p/mile to 10,000; 25p after
- Rule
- Mileage OR actual costs, plus a journey log
Full guide
Read the complete landlord guide on Mileage Allowance
Deadlines, fines and step-by-step compliance in our in-depth resource.
Open full guideWhy Mileage Allowance matters for landlords
Mileage is a small deduction landlords routinely forget, yet a portfolio spread across a town can generate hundreds of business miles a year in inspections and repair visits. The catch is evidence: HMRC expects a contemporaneous log of dates, destinations and purpose, not an estimate at year end. Commuting to a single property you manage from home can be contentious, so keep the journeys clearly tied to letting activity.
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Official sources
LetCompliance editorial reviews this entry every quarter against the sources above. Always confirm specific duties with a qualified solicitor or your local council.
Related terms
Allowable Expenses
The day-to-day running costs a landlord can deduct from rental income before tax. They must be wholly and exclusively for the letting — letting agent fees, repairs and maintenance (not improvements), landlord insurance, ground rent and service charges, accountancy, and utility or council tax you pay. Mortgage interest is handled separately as a 20% tax credit under Section 24, not as an expense.
Capital Expenditure vs Revenue Expenditure
The line that decides whether a cost reduces your rental profit now or your Capital Gains Tax later. Revenue expenditure (repairs, maintenance, replacing like-for-like) is deducted from rental income in the year you spend it. Capital expenditure (improvements, extensions, first-time installation of something new) is added to the property’s cost base and only counts against CGT when you sell.
Replacement of Domestic Items Relief
The tax relief that lets landlords deduct the cost of replacing furnishings and appliances in a let property — beds, sofas, carpets, curtains, white goods, crockery. It replaced the old Wear and Tear Allowance in April 2016. It covers the like-for-like replacement cost only, not the first-time purchase of an item and not any improvement element.
Mandatory Ground
A ground for possession under Schedule 2 of the Housing Act 1988 that the court must grant if proved. Examples include Ground 1 (landlord moving in), Ground 1A (sale) and Ground 8 (serious arrears). Contrast discretionary grounds, where the court decides if possession is reasonable.
MEES (Minimum Energy Efficiency Standards)
Regulations requiring rental properties in England and Wales to meet a minimum EPC rating of E. Landlords cannot grant a new tenancy or continue an existing one for an F or G property without a valid exemption. Maximum fine: £5,000 per property.
Mortgage Interest Tax Credit (Section 24)
The 20% basic-rate tax credit that replaced full mortgage interest deduction for individual UK landlords under section 24 of the Finance (No.2) Act 2015. From 6 April 2020, finance costs (mortgage interest, loan interest, mortgage broker fees) are no longer deductible from rental profits; instead HMRC gives a tax reducer at the basic rate, capped at the lower of finance costs, property profits or adjusted total income after personal allowance. Higher- and additional-rate taxpayers are materially worse off than pre-2017; Limited Company landlords are unaffected because Ltd interest remains a fully deductible business expense.