Your records
Discover why and how you should maintain accounting records for your letting business.
Why keeping records for UK property tax is essential.
For many years, the Self Assessment regulations have set out what is required with regards to record keeping for your UK property business.
As Self Assessment is gradually closed and replaced by Making Tax Digital (MTD), more and more taxpayers will have to follow the record keeping requirements of MTD, which are a legal requirement after 6th April 2026.
Records of all information used to complete tax returns must be kept for 22 months after the end of the tax year, or for 5 years and 10 months for those carrying on a business or who have income from letting out property. There is a maximum penalty of £3,000 for each tax year for which records have not been kept.
Self Assessment taxpayers
If you use a managing agent, then most of the relevant expenditure will appear on their rental statements, and this is generally sufficient for our purposes. We will ask you for details of any additional expenditure that may not appear on the agents statements (for instance, loan interest) – but usually this amounts to only a few items.
However, if you do not use a managing agent or you need to assess the profitability across a larger portfolio, you will need to maintain a record of income and expenditure.
For some clients, keeping records is second nature, while for others it is a real struggle that just gets in the way of running the business. We try to help where we can. If you have a smaller portfolio and want to keep your own records, but are not sure how, then we can help.
Download our free Income & Expenditure spreadsheet and get started
Our FREE Property Income & Expenditure spreadsheet provides the landlord with a single property or a small portfolio with a convenient easy way to record income and expenditure. If you complete this, we can do the rest.
Our spreadsheet comprises a sheet for each property, and one for expenses that cannot be easily allocated to a single property. For each property there is a column for each main type of income and expenditure, and several lines for each month. Completing it is easy. Each time you spend something, find the relevant column and go down the page until you get to the right month, then just enter the figure. And that’s the end of it. This system works well with smaller portfolios.
Making Tax Digital (MTD) taxpayers
MTD requires clients to maintain digital records of their income and expenses as the basis for quarterly submissions to HMRC. Digital records alone are not sufficient, taxpayers must ensure they have the original financial information (invoices, bank statements, etc.) from which the digital records were made, and that they retain these for the appropriate period. The new MTD for ITSA regulations require a relevant person to keep and preserve their tax records digitally and to submit reports to HMRC using approved software. A report of the business’s property income, allowable expenditure and claims for allowances or reliefs against such income must be submitted in relation to each tax year. Interim cumulative reports must be submitted quarterly on fixed dates that are set out in the regulations.
Reduced quarterly reporting is possible for jointly owned property income, and for businesses where the income level is below the VAT threshold. However, full records will be required for the end of year tax return.
The digital record must show for each transaction, date, value and category. The software used must be capable of interfacing with the HMRC system and uploading cumulative data without the need for re-keying.
HMRC is not supplying any software, but there are several commercial organisations providing HMRC-approved software.
Many business owners will find it convenient to maintain a separate bank account to be used exclusively for the business.
Why keeping records for UK property tax is essential.
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