Can landlords claim council tax and utility bills?

Yes, if you pay them. GOV.UK lists water rates, council tax, gas and electricity as expenses landlords can claim, so for 2026-27 they come off your rent. If the tenant pays, you have nothing to claim.

The rules below follow GOV.UK, HM Revenue and Customs' Property Income Manual (PIM) and the council tax legislation, checked on 17 October 2026, and apply to individual landlords in England.

Who pays the bill decides it

GOV.UK's guide to rental income lists "water rates, council tax, gas and electricity" among the expenses you can deduct "if you pay for them yourself". The usual test applies: the cost must be wholly and exclusively for renting out the property.

HMRC's manual (PIM2140) explains who normally pays council tax:

• A home let to one household. Liability falls mainly on the people living there, so the tenants pay and you claim nothing.
• An empty property. The owner pays.
• A house in multiple occupation (HMO). HMRC names this as a case where the landlord pays. The Council Tax (Liability for Owners) Regulations 1992 make the owner, not the tenants, liable for any one of these: an HMO, a home built or adapted for people who are not one household, or a home where each person living there rents only part of it, such as a room.
• You live there too. Where you and your tenants share one dwelling, you are liable. If part of the property is let and part is yours, PIM2140 allows a suitable proportion.

Bills-included rent is all income

GOV.UK says rental income includes charges for services you provide, naming hot water and heating. HMRC's manual (PIM2076) says you can claim the cost of services you provide, as long as what you receive for them is part of your property income. So a bills-included rent goes in your records in full, and each bill you pay goes in as an expense.

That gross figure also matters for Making Tax Digital (MTD), because qualifying income is rent before expenses. A bills-included HMO can cross the MTD threshold sooner than the same house let with bills paid by the tenants. The threshold is £30,000 for 2025-26 income and £20,000 for 2026-27 income.

In our reading, broadband and a TV licence you buy for the tenants are costs of services in the same way, though GOV.UK does not name them. PIM2076 notes that a full package of services charged separately, as in a serviced block, can occasionally be a separate trade. That is rare for an ordinary shared house.

Which bills count when

Recharged bills

Some landlords keep a water or energy account in their name and charge the tenant for it. In our reading, the recharge is a receipt of the property business and the bill is an expense, so the two cancel out. Record both, because leaving both out understates your income before expenses.

The empty homes premium

GOV.UK says councils can charge more council tax once a home has been empty for at least 1 year, up to 4 times the normal bill after 10 years. Section 11B of the Local Government Finance Act 1992 sets the extra at up to 100% under 5 years, 200% from 5 years and 300% from 10 years. It applies to homes both unoccupied and substantially unfurnished, and gaps of 6 weeks or less are ignored. The 1-year test applies to council tax years from 1 April 2024.

From 1 April 2025, SI 2024/1007 stops councils charging it for up to 12 months while a home is marketed to let on reasonable terms. After that, the home only qualifies again once it has been let on an assured tenancy or one granted for 6 months or more. A furnished empty home can instead face the second homes premium, up to 2 times the normal bill, with the same exception. Check your council's own rules.

In our reading, any premium you pay during a void is part of council tax and is claimed in the same way. A home empty for over a year raises the question of whether you are still letting, which our empty property guide covers.

A worked example

A landlord in Nottingham lets a 4-bedroom HMO at £625 a room each month, bills included. One room is empty for 2 months in 2026-27.

She records £28,750 of income and £7,200 of expenses. Her profit before other costs is £28,750 − £7,200 = £21,550. The £28,750 is also her qualifying income for MTD. If she has no other self-employment or property income, it is over the £20,000 threshold for 2026-27, so she needs MTD from 6 April 2028. This is an example only.

What this means for you

In our reading, the question is never the type of bill, only who is liable and who pays. If you pay it for a let you run commercially, record it, and record any bills-included or recharged money as income. For tenancies from 1 May 2026, the written statement must say which bills are in the rent, which also helps your records.

Steps to record your bills

1. For each property, list who is named on each bill: council tax, gas, electricity, water, broadband and TV licence.
2. Record every bill you pay as an expense, with the date and the property.
3. Record bills-included rent and any recharges in full as income.
4. Note the dates of each void, and keep proof you were trying to re-let.
5. Leave out any period when you or family lived there rent-free.
6. Keep the bills and statements for at least 5 years after the 31 January deadline for that year's tax return.

The free MTD check shows when Making Tax Digital starts for you, and the landlord section has more guides.