HMRC is issuing 'correction letters' to landlords to confirm a change in guidance: a new boiler can be considered an allowable expense against rental income, even when it constitutes an upgrade driven by advancements in technology.
In December 2023 HMRC began sending One-To-Many Letters to landlords who, according to HMRC's data, claimed higher levels of expenditure on repairs and maintenance than other landlords with similar income.
HMRC was concerned that landlords may have included Capital costs in their Repair and maintenance expenses. The letter included examples of what constitutes revenue and capital costs.
In that letter, HMRC stated that unallowable capital costs included upgrading a central heating boiler from an older, less efficient model.
HMRC has now admitted that the One-to-Many letter included misleading advice and was not accurate. They have issued a correction letter confirming that an upgraded new boiler may be allowed as an expense against rental income when:
- it consist of an upgrade due to an advance in technology, and
- the new item does broadly the same job as the old one.
Recipients of the One-to-Many letter who subsequently amended their self-assessment return regarding a boiler expense are requested to review it again and email HMRC at
Useful guides on this topic
Landlords: HMRC's One-To-Many letters
HMRC's latest One-To-Many letter campaign targets landlords claiming tax relief on high levels of repair costs.
Repairs and renewals
What expenses can you claim for tax? In what situations are repairs disallowed and treated as capital expenditure?
Property profits & losses: Toolkit (2023-24)
Our Property Profits & Losses toolkit takes HMRC's version and adds a great deal more information about what you can claim as an individual.
Restricting mortgage interest relief
Since April 2020, individual landlords' tax relief for finance costs on residential property has been limited to the basic rate of Income Tax. How is the relief calculated? How were the provisions introduced?
Replacement of Domestic Items Relief
What is Replacement of Domestic Items Relief? When can it apply and what conditions must be met?
Landlords: Capital allowances
Can I claim Capital Allowances in my rental business? What capital allowances can be claimed by a landlord?
External links
CIOT: HMRC correction issued for OTM letter for rental cost deductions
CIOT: HMRC One to Many Letters sent to landlords concerning rental costs
