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Void Period Expenses: What Landlords Can Claim

Void Period Expenses: What Landlords Can Claim ! Geometric illustration of a gap between rental properties A void period is the time a rental property has no tenant.

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Void Period Expenses: What Landlords Can Claim

Geometric illustration of a gap between rental properties

A void period is the time a rental property has no tenant. Costs that keep the property ready to let, such as council tax, utilities, insurance and letting fees, can generally be deducted from rental income if they are wholly and exclusively for the rental business. The rent that was not received cannot be claimed, because it was never income. Ledgery records each of these costs from a receipt photo and places them in the quarterly update for HMRC, so a void does not leave gaps in the property record.

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TL;DR

  • Costs of keeping a vacant, to-let property running are usually deductible: council tax, water, gas and electricity, insurance, agent fees and advertising for new tenants.
  • Lost rent is not an expense. No rent received means no income to report, and no deduction to claim.
  • Repairs that restore the property are deductible. Improvements that change it are capital and are not.
  • Mortgage interest on residential lets is handled through a basic rate tax reduction, not as a deduction from profits.
  • Receipts, invoices and bank statements for the void must be kept for at least 5 years after the 31 January filing deadline.

Table of Contents

What a void period costs a landlord

When a tenant leaves, the tenant’s payments stop but the property’s costs continue. The owner usually takes over the bills that the tenant paid. HMRC’s Property Income Manual states that where a dwelling is empty, council tax is paid by the owner. Councils in England, Scotland and Wales have discretion over discounts on empty homes, and properties empty for more than twelve months can be charged an empty homes premium. The local council sets the exact rules, so the billing authority’s own page is the place to check the current position for a given postcode.

Typical costs in a void include:

  • council tax
  • water rates
  • gas and electricity, including standing charges
  • buildings and contents insurance
  • mortgage payments
  • letting agent fees for finding a new tenant
  • advertising the property
  • cleaning, redecoration and repairs between tenancies

Most of these can be claimed. The next section explains the test that decides which ones.

The test HMRC applies

GOV.UK guidance on working out rental income says rental expenses can be deducted when they are wholly and exclusively for renting out the property. The list it gives includes water rates, council tax, gas and electricity, insurance, letting agent fees, legal fees for lets of a year or less, accountant’s fees, and direct costs such as phone calls, stationery and advertising for new tenants.

The phrase “wholly and exclusively” matters during a void. A property that is empty because the owner is looking for a tenant is still being run as a rental. A property that the owner is using personally, or holding while undecided about selling or moving in, raises a different question. Costs for any personal use are not rental costs and have to be split or left out.

Does the rental business stop during a void?

No, not in the normal case. HMRC’s manual on the beginning and end of a property business states that a property business will not normally cease just because the tenant leaves and the property stands empty while a new tenant is sought. Where there is evidence of unsuccessful attempts to find tenants, the business can normally be treated as continuing. The same page gives a rule of thumb that a gap of more than three years with different properties let before and after suggests the old business has ended, and says this is guidance only.

The practical point is evidence. Listings, agent instructions, advertising invoices and viewing records show that the property was genuinely available to let.

Expense by expense

Council tax, water, gas and electricity

These appear on the GOV.UK list of allowable costs and are the main running costs of a void. Where the owner pays them because the property is empty, they are rental expenses. Meter readings taken on the day a tenancy ends and the day the next one starts make it clear which bills belong to the void and which belong to a tenant.

Insurance

HMRC’s manual on insurance states that allowable premiums include those for properties held for letting but vacant for the time being, as well as properties that are let. It covers risks of damage to the fabric, damage to contents and loss of rents. A guide to insurance deductions for landlords gives further examples of premiums that remain allowable while a property is empty. Policy terms on empty properties vary by insurer, so the policy wording is worth reading before a void begins.

Letting agent fees and advertising

Fees to find a new tenant, advertising costs and the direct costs of arranging viewings fall within the GOV.UK list. Where an agent manages the property, the monthly statement often mixes rent, fees and costs on one page. Ledgery’s page on letting agent statements and property bookkeeping explains how to record those figures so that gross rent, agent charges and other costs are not netted off against each other.

Repairs and redecoration between tenants

A void is when most repairs happen. GOV.UK guidance says general maintenance and repairs are deductible, but enhancements or improvements that are capital expenditure are not, unless they qualify for replacement of domestic items relief. In practice, replacing worn roof tiles or a broken boiler restores something that existed, so it is normally an expense. Adding an extension or creating something that was not there before is capital.

A mixed job needs splitting. Repainting a flat and replacing a damaged door are repairs. Converting a cupboard into an en-suite is an improvement. The invoice should describe the work in enough detail to show which is which, and a single line reading “works” is a poor record.

Examples contrasting rental repairs and improvements

Mortgage interest

For residential lets, HMRC’s manual on interest states that from 2020-21 onwards no deduction is allowed in calculating profits for interest and finance costs. An individual instead deducts from their tax bill an amount equal to the otherwise unrelieved finance costs multiplied by the basic rate of tax for the year. The same page says the interest does not have to be split where the owner is genuinely trying to let a property that is empty because no tenant has been found. Interest during a void therefore stays in the finance costs calculation and is not reduced because the property was vacant.

Arrangement fees and other borrowing costs follow related rules. The Ledgery article on mortgage arrangement fees and tax covers what landlords can claim.

Bank charges

Charges on an account used for the rental business are a separate category. Bank charges and HMRC sets out what self-employed people and landlords can claim.

What cannot be claimed

The largest loss in a void is the rent, and it has no tax treatment. Rent that was never received is not part of the income figure, so nothing is deducted. This is a common source of confusion: the void is already reflected in lower income.

Other items that are not rental expenses:

  • costs for time when the owner or family stays in the property
  • improvements that add a new feature or enhance the property
  • the part of any bill that relates to personal use
  • residential mortgage interest as a deduction from profits, which is replaced by the basic rate reduction

A worked example

The figures below are an illustration, not a benchmark.

A landlord lets a flat at £1,200 a month. The tenant leaves and the flat is empty for six weeks, about a month and a half. During that time the owner pays:

Cost Monthly amount For 1.5 months
Council tax £140 £210
Gas and electricity £85 £127.50
Insurance £30 £45
Advertising and viewings n/a £60
Redecoration and a repair n/a £250
Total allowable costs £692.50

The rent not received over six weeks is £1,200 × 12 ÷ 52 × 6, which is about £1,661.54. That figure is not claimed. The £692.50 is deducted from rental income for the year. For a basic rate taxpayer that reduces the tax bill by £138.50, at 20%. For a higher rate taxpayer at 40% the reduction is £277.

The deduction softens the cost of a void and does not replace the lost rent. The tax saving is a share of the money spent, so the void is still more expensive than the receipts suggest.

A worked example

Cash basis or accruals

The timing of a deduction depends on the accounting basis. Under the cash basis, HMRC’s manual on cash basis for landlords states that expenses brought into the calculation are those paid during the tax year, subject to adjustments required by law, such as the wholly and exclusively rule. A council tax bill paid in the next tax year falls into that next year. Under accruals the cost is matched to the period it relates to. Ledgery’s article on cash vs accruals compares the two for UK sole traders, and the same principle of paid versus incurred applies to a void.

If a property business ends

Some voids end with a sale and no new tenant. HMRC’s guidance on post-cessation expenses states that expenses which would have been allowable had the business continued can be deducted from post-cessation receipts. Its example is background heating for empty premises, to keep down condensation and preserve the value of the property for sale. The same manual also describes post-cessation property relief for certain qualifying payments made within 7 years of the business ending. The claim has a deadline set by that page. A landlord in this position should check the page or speak to an accountant before filing.

Records for void-period costs

GOV.UK’s guidance on rental income records says landlords should keep the dates the property was let, rent and service income, rent books, receipts, invoices, bank statements and allowable expenses paid to run the property. The GOV.UK rental income guidance adds that records must be kept for at least 5 years after the 31 January tax return deadline for each tax year. HMRC can charge a penalty if records are not accurate, complete and readable, or are not kept for the required period.

For a void, a useful file contains:

  1. The date the tenancy ended and the date the next one began.
  2. Final meter readings and the first readings for the new tenant.
  3. Proof the property was advertised or with an agent.
  4. Bills and receipts for each cost, with the property address on them.
  5. Contractor invoices that describe the work.

Safety certificates are part of the same file, since gas, electrical and similar checks are often done between tenancies. A guide to PAT testing records for landlords explains how those documents are kept.

Making Tax Digital and the void

Sole traders and landlords whose total annual income from self-employment and property is over £50,000 must use Making Tax Digital for Income Tax from 6 April 2026, according to GOV.UK’s step-by-step guide. That guide says HMRC does not provide the software, so a landlord or their agent needs compatible software to keep digital records and send quarterly updates. The page also sets out who is covered and the wider timetable, which should be checked there for the current position.

In a quarterly system, a void shows up as a quarter with little or no rent and a set of costs. Each cost needs to be in the record when the quarter is sent. Receipts collected at the end of the year in a shoebox no longer fit that pattern.

Recording void costs with Ledgery

Ledgery is income tax software for UK self-employed people and property owners. Users photograph a receipt, the AI-powered scanning reads it, and the record is stored with the property income and expenses. Quarterly HMRC updates are generated from those records, and deadline reminders are sent. The service supports sole trader and property income. It does not support limited companies or VAT. Ledgery also offers Open Banking feeds, invoice creation, export and accountant access, and the filing to HMRC is controlled by the user. The first quarter is free, after which there is a paid monthly or annual subscription on the Simple, Grow or Pro plan. Details are on the Ledgery website.

Ledgery

For a landlord with a void, the practical use is small: photograph the council tax bill, the advertising invoice and the contractor’s receipt as they arrive. Each lands in the property record. The page on receipt scanning and OCR describes how this works for MTD.

Our view on voids

Voids are a bookkeeping problem as much as a rental problem. The costs are small and spread across several weeks, from several suppliers, and are often paid from a personal account while the tenant’s rent has stopped.

Small costs are the ones that go missing. A single council tax bill or a cleaning receipt is easy to lose, and under quarterly reporting it is easier still to lose it in a quarter in which little else happened.

We built Ledgery to bring bookkeeping, receipt scanning, Open Banking feeds and tax filing for self-employment and property income into one platform. That means a landlord can photograph the receipt on the day, and the quarterly update is generated from records that are already complete. Accountants can be given access to the same records, and the landlord keeps control of what is filed to HMRC.

The first quarter is free, so a landlord can run a void through the system before deciding whether it suits them.

The Ledgery Team

FAQ

Can a landlord claim council tax during a void period?

Yes, in the normal case. HMRC’s manual states that the owner pays council tax on an empty dwelling, and council tax is on the GOV.UK list of rental expenses. The property must be genuinely available to let. Councils set their own discounts and premiums, so the billing authority has the current rules.

Can lost rent be claimed as an expense?

No. Rent that is not received is not income, so there is nothing to deduct. The void reduces the income figure automatically. Only the costs paid during the void are claimed.

Is a repair during a void deductible?

Usually, if it restores the property to its previous condition, such as fixing a boiler or replacing worn tiles. An improvement that adds something new is capital expenditure and is not deductible from rent, unless it qualifies for replacement of domestic items relief.

How long should void records be kept?

At least 5 years after the 31 January tax return deadline for the relevant tax year, according to GOV.UK. Records need to be accurate, complete and readable, and HMRC can charge a penalty otherwise.

Sources

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This article is general information about Making Tax Digital, not tax advice for your situation. Rules and dates come from HMRC guidance current at the date of publication — check the latest position before acting, or speak to an accountant.