Nottingham selective licensing fees: how landlords should record and claim them in their accounts
Nottingham selective licensing fees are normally allowable running costs of a residential rental business. From 1 April 2026, the individual-property fee is £759 for accredited landlords, £950 for non-accredited landlords or £1,318 where the council applies its less-compliant rate. Each fee is paid in two stages. On the cash basis, landlords generally deduct payments in the tax year paid. Under traditional accounting, including for companies, costs relating to future licence periods are normally apportioned over those periods. Keeping each property’s licence separate makes tax returns and renewals easier.
Civil fines and licensing penalties are not allowable business expenses. Do not mix them with the cost of obtaining a licence.
What you will actually pay
| Landlord status | Total fee per property from 1 April 2026 |
|---|---|
| Accredited with DASH, Unipol or ANUK | £759 |
| Non-accredited | £950 |
| Assessed by the council as less compliant | £1,318 |
Under Nottingham City Council’s selective licensing fees, Part A is £290 on application. Part B is £469 for accredited landlords, £660 for non-accredited landlords or £1,028 for less-compliant landlords, payable later in the application process. The current selective licensing scheme runs until 30 November 2028; an individual licence cannot simply be assumed to last five years. Some blocks have different fees. HMOs may instead require another licence under Nottingham City Council’s additional licensing page.
Check whether your existing licence remains valid before budgeting for renewal. The fees shown apply to individual property applications, while block licences have separate charging arrangements and eligibility criteria.
How to record it
| Your position | Treatment |
|---|---|
| Individual landlord on the cash basis | Normally deduct Part A and Part B in the tax years they are paid |
| Individual landlord on traditional accounting | Allocate qualifying costs across the period to which they relate, where material |
| Limited company | Apply accruals accounting and recognise any material unexpired licence cost as a prepayment |
| Civil penalty, rent repayment order or fine | Penalties are not deductible; assess rent repayment orders separately rather than treating them as licence fees |
| Application fee charged by a letting agent | Generally an allowable management expense, subject to the usual rules; check any VAT |
HMRC’s cash-basis guidance generally recognises expenses when paid. Traditional accounts follow accruals principles instead. The appropriate allocation depends on the licence’s actual period, the amount and your accounting policy. Record each licence against its property, with payment dates and expiry details, rather than hiding the fees in a general repairs account.
A worked example
Suppose a Nottingham landlord owns four rental houses. Three qualify for the £759 accredited rate and one is charged £950. Total fees are £3,227: three times £759 plus £950. Recording the whole amount as repairs would distort the figures and make the true maintenance cost harder to track.
Need Expert Accounting Advice?
If you are unsure about tax, bookkeeping, payroll, property accounts or business finances, speak to the team at FHP Accounting for clear, practical guidance.
On the cash basis, the landlord normally records each payment when made. Using traditional accounts, the relevant licence cost is allocated over its actual period, with any unexpired element held as a prepayment where material. A licence ending in November 2028 should not automatically be spread over five years. Keep an expiry schedule for every property.
Where mistakes creep in
Common mistakes include coding licences as repairs, overlooking Part B when it falls in another tax year, and paying for a property outside the designated area or covered by a different licensing regime. Use the council’s address checker before applying and retain the invoice, licence and proof of both payments.
For landlords within Making Tax Digital, accurate categories support quarterly summaries. It started in April 2026 for qualifying income over £50,000, with lower thresholds introduced in stages. Our guide to how agent access works under MTD explains the reporting process. Entering the cost correctly in Xero and maintaining regular bookkeeping reduces year-end adjustments.
If your licensed property sits inside a bigger structure
Landlords who also operate companies should reconcile licence costs across their records. Companies House paused plans to require small and micro companies to file profit and loss accounts from April 2028, although software-only filing remains planned; see our checklist for property companies. Separate service charge receipts and costs from rent, using our guide to service charge accounting and year-end service charge statements. Resident management directors can read RTM annual accounts and the RICS and ARMA best practice guide. If your agent charges VAT, review your HMRC VAT account separately.
FAQs
Are landlord licence fees tax deductible?
Generally yes. Fees for legally required selective, additional and mandatory property licences are normally revenue expenses of a rental business. The timing of relief depends on your accounting basis and circumstances.
Do I claim the whole fee in one year?
On the cash basis, normally claim Part A and Part B when paid. Under accruals accounting, allocate material prepayments over the relevant licence period, which may be shorter than five years.
Can I claim a fine for letting without a licence?
No. A civil penalty or fine is not an allowable rental expense. Rent repayment orders need their own tax assessment rather than being treated as licence costs.
Get your licence costs recorded properly
If you are unsure how licence fees appear in your records, FHP Accounting can help. Based in Nottingham, we support property owners through our landlord accountant service, property tax advice, personal tax returns and company tax returns. Get in touch to discuss your accounts and upcoming renewals.
I lead FHP Accounting, an accountancy practice specialising in Commercial and Residential Property Accounting. Our goal is to make the administration of running property portfolios easier for landlords, managers, and investors — allowing you to focus on what you do best, while we take care of everything behind the scenes.
Need Expert Accounting Advice?
If you are unsure about tax, bookkeeping, payroll, property accounts or business finances, speak to the team at FHP Accounting for clear, practical guidance.
