Wear and Rear Allowance and Wages

Wear and tear allowance

Income from furnished lettings is part of the taxpayer’s rental business. Generally the same rules apply as for other lettings.  But where a taxpayer lets a residential property furnished, capital allowances can’t be claimed on furniture, furnishings or fixtures within the property. Instead a deduction can be claimed for either:

  • a wear and tear allowance of 10% of the ‘net rent’ from the furnished letting to cover the use of items such as furniture, fridges etc supplied with the accommodation, OR
  • the net cost of replacing a particular item of furniture etc, but not the cost of the original purchase; this is called a ‘renewals allowance’.


See payroll; information must be submitted to HM Revenue & Customs on or before each payment is made unless the business is small.  In this case the return to HMRC needs to be made once, at the end of each month.

Tax and national insurance due should be paid over to HMRC by the 22th of the month.  For example your employees are paid on 28th of May, this is in the tax month to 5 June and so any taxes and national insurance should be paid by the 22th of June.

Small employees can make payments to HMRC quarterly, see the A-Z blog: Q is for… for more details.