Wear and Tear Allowance is an allowance that was available to landlords of furnished rental properties until 5 April 2016 to reflect general the general wear and tear of furnishings in a property they rent out.

What is Wear and Tear Allowance?

Wear and Tear Allowance is available to landlords renting out a furnished property.  It is a deduction against rental profits and is calculated at 10% of rent less rates (commonly referred to as net rent).

An Example of Wear and Tear Allowance

A landlord rents out a furnished property at £1,200 pcm and pays rates of £1,400 for the year.  Therefore the landlord is able to deduct wear and tear allowance from their rental profits for the year of £1,300.

Landlord bookkeeping and taxes

Wear and Tear Allowance Abolished

Wear and tear allowance was abolished from 6 April 2016.  Instead landlords are now allowed to claim for the costs of any actual replacements to furnishings that they have paid for. So for example if a sofa is replaced, a landlord can claim for the actual cost of buying a new sofa rather than the yearly flat rate under the rules of wear and tear allowance.