Here we look at the different elements it’s worth considering if you’re a landlord. 
Business element separately identifiable
If it is possible to separate the business and the private expenditure, a deduction can be claimed for the business element. This may be the case, for example, in relation to a car which is used for both private journeys and for the purposes of the property rental business, to visit tenants or to check on the properties. Likewise, a landlord may use his or her mobile phone for private calls and also for business calls. From the call log, it will be possible to identify the business calls and to apportion the bill between business and private calls.
Business element cannot be separately identified
If the expenditure is dual purpose in nature and it is not possible to identify the business element, no deduction is allowed. The expenditure does not meet the ‘wholly and exclusively’ test, and as such is not deductible in computing the profits of the property rental business. An example of expenditure that may fall into this category is clothing, even if only worn for working in the property rental business. The clothing fails the wholly and exclusively test as it also provides the landlord with warmth and decency (a private purpose). However, it should be noted that a deduction is allowed for clothing that bears a conspicuous advert for the business, such as a sweatshirt featuring the name of the property rental business and the logo.
Example
Heather is a landlord and has a number of properties that she rents out to students. She uses the same car for the purposes of the property rental business as for private journeys.
Heather undertakes the decorating and much of the maintenance on the properties herself. She has purchased overalls specifically for this purpose, whichshe wears only when undertaking work on the let properties. In the tax year, she spends £80 on overalls.
In the tax year in question, Heather drove 6,800 miles of which 4,200 were for the purposes of her property rental business.
A deduction is allowed for the business mileage. Heather uses the simplified mileage system, claiming a deduction of £1,890 (4,200 miles @ 45p per mile).
However, although she only wears the overalls when working on her let properties, the private benefit cannot be distinguished from the business use. Consequently, the ‘wholly and exclusively’ test is not met, and the £80 which Heather spent on overalls cannot be deducted in computing the taxable profit for her property rental business.
