You’ve paid for work at your rental property.
Maybe it was a plumber, an electrician or another contractor. The work genuinely relates to the property you let out, and you’ve paid the bill.
Then you look at the invoice.
Your name isn’t on it.
Maybe it has your spouse’s name. Maybe it has your former partner’s name. Or maybe it simply shows the address of the rental property.
Perhaps the account has been in somebody else’s name for years, and nobody thought to change it.
So does that mean you’ve lost the tax deduction?
Not necessarily.
The name printed on a bill or invoice can be important evidence, but it is not the only thing that determines whether an expense can be deducted when calculating your rental profit.
What actually makes a landlord expense allowable?
For tax purposes, the starting point is what the expense was actually for.
HMRC’s Property Income Manual explains that expenses generally need to be incurred wholly and exclusively for the purposes of the property business. Capital expenditure is dealt with differently.
So, before worrying only about the name on the invoice, consider:
- What was purchased or what work was carried out?
- Which property did it relate to?
- Was the expense genuinely incurred for the rental business?
- Who actually incurred the expense?
- Who paid it?
- Was it a repair or an improvement?
- What evidence is available to support the claim?
These questions become particularly important when the paperwork is not straightforward.
Example: the plumber’s invoice has your spouse’s name
Imagine you and your spouse own a rental property.
The boiler breaks down, and a plumber carries out a repair.
You pay £600 from your bank account, but when the invoice arrives, it has your spouse’s name at the top because they were the person who originally contacted the plumber.
Does that automatically mean the £600 cannot be taken into account when calculating the rental profit?
No. You should not reach that conclusion from the name alone.
You need to consider the wider circumstances, including the ownership of the property, who incurred the expense, what the work related to and the evidence supporting the payment.
This is particularly important with jointly owned properties, where legal ownership, beneficial entitlement to the income and the way rental profits are taxed all need to be considered.
If you own a rental property with somebody else, you may also find our article We Own a Rental Property Together — Who Pays Tax on the Rental Income? helpful.
What if the invoice only shows the rental property’s address?
This can happen quite easily with tradespeople.
For example, an invoice might simply show:
Boiler repair
12 Example Road
£600
There may be very little information identifying the landlord.
Again, that does not tell us the whole story.
An invoice showing the rental property’s address can help establish that the work related to that particular property. But you should also keep other records supporting the transaction.
HMRC’s rental-income record-keeping guidance explains the importance of keeping records such as receipts, invoices and bank statements.
You might therefore have:
- The invoice from the contractor.
- The corresponding bank payment.
- Emails or messages arranging the work.
- Details of the repair carried out.
- Other documents connecting the expenditure to the rental property.
Together, these records can provide a much clearer picture than the invoice alone.
What if somebody else paid the bill?
Now we have a different question.
Suppose the invoice relates to your rental property, but somebody else actually paid it.
That does not mean you should automatically include the expense in your rental accounts simply because the work happened at your property.
You need to establish what actually happened.
Did you reimburse the person who paid?
Was the cost incurred on your behalf?
Was it an expense of a jointly owned property?
Or was it genuinely somebody else’s expense?
These are important distinctions.
The person who physically makes a payment is not necessarily the person who incurred the expenditure for tax purposes.
And where a rental property is jointly owned, the way allowable expenses are reflected in each owner’s taxable share of the rental profit needs to be considered alongside the relevant ownership and income-tax rules.
The important thing is to understand the underlying transaction before deciding how it should appear in the rental accounts.
Prefer to watch? In this video, I explain why the name on a rental-property invoice is not necessarily the deciding factor when working out whether an expense can be claimed.
Video is live tomorrow
The opposite problem: your name IS on the bill
There is another side to this.
Having your name printed on an invoice does not automatically make an expense tax deductible.
Imagine you own a rental property and spend money substantially improving it.
The invoice is addressed perfectly.
Your name. Your rental property’s address. You paid it yourself.
That still does not automatically mean the expenditure can be deducted from your rental income.
Why?
Because you must also consider what the expenditure was for and whether it is revenue or capital expenditure.
A genuine repair may be treated differently from an improvement, even when both relate to the same property.
If you’re unsure about the distinction, read our article on landlord repairs versus improvements and why the difference matters for tax.
So remember:
Correct name ≠ automatically allowable.
Different name ≠ automatically disallowed.
What matters is the nature of the expenditure and the underlying facts.
Keep the evidence that tells the whole story
If you have rental-property expenses where the paperwork is not straightforward, don’t simply disregard them because the invoice doesn’t have exactly the name you expected.
But equally, don’t claim them blindly.
Keep the evidence.
That might include:
- The invoice or receipt.
- The relevant bank statement.
- Correspondence with the contractor or supplier.
- Details of the work carried out.
- Evidence connecting the expenditure to the rental property.
- Where relevant, information explaining why somebody else’s name appears on the document.
You should be able to explain what happened and why you believe the expense is allowable.
This is especially important if you are reconstructing rental income and expenses for earlier tax years, where the original records may be incomplete.
The key point
If a bill relating to your rental property isn’t in your name, don’t decide whether it is allowable based solely on the name printed at the top.
Establish the facts.
What was the expense? Why was it incurred? Who incurred it? Who paid it? Which property did it relate to? And what records do you have to support the claim?
Those questions provide a much better starting point for deciding the correct tax treatment.
And remember, just because you paid for something does not automatically make it tax deductible. The nature and purpose of the expenditure still matter.
Not sure whether your rental-property expenses have been treated correctly?
If invoices are in different names, expenses have been paid by different people, or you’re reconstructing rental income and expenses from earlier years, Grace Certified Accountants can help you establish the correct tax position.
Book a paid Tax & Property Consultation with Grace Certified Accountants to discuss your circumstances.