What Records Do Landlords Need to Keep for Tax?

Landlords must keep detailed records of income, expenses, and legal documents to stay compliant with HMRC. Learn exactly what to record and how long to keep it.

Introduction

Keeping accurate records is one of the most important responsibilities for any landlord. Whether you rent out one property or manage a large portfolio, HMRC requires you to maintain detailed financial records to support your tax return. Good record keeping not only ensures you stay compliant but also helps you claim all allowable expenses, reducing the amount of tax you pay.

This article explains exactly what records landlords need to keep for tax purposes, how long to keep them, and how to organise your information efficiently.

Why Record Keeping Matters

HMRC expects landlords to keep full and accurate records of their rental income and expenses. These records are used to calculate your taxable profit — the amount of rental income left after deducting allowable expenses.

If HMRC ever checks your tax return, you will need to provide evidence to back up the figures. Failing to keep adequate records can lead to penalties, loss of allowable expense claims, and delays in resolving disputes.

Good records also help you:

  • Monitor your property’s financial performance.

  • Identify opportunities to reduce costs.

  • Prepare for changes under Making Tax Digital for Income Tax, which will require digital record keeping.

What Income Records You Must Keep

You must keep detailed records of all income from your rental properties, including:

  • Rent payments received from tenants.

  • Deposits (and whether they were returned or retained).

  • Insurance payouts related to the property.

  • Income from services provided to tenants, such as parking, cleaning, or laundry.

If you use a letting agent, keep all agent statements and any communication showing rent received and fees deducted. If you manage properties yourself, bank statements should clearly show rental payments as they come in.

What Expense Records You Must Keep

You can deduct many costs from your rental income when calculating your taxable profit. To claim these deductions, you need to keep evidence such as receipts, invoices, and statements.

Allowable expenses include:

  • Letting agent or management fees.

  • Mortgage interest (subject to the 20% tax credit rules).

  • Repairs and maintenance, such as fixing leaks or replacing broken appliances.

  • Utility bills, council tax, and insurance (if you pay these yourself).

  • Advertising and marketing costs.

  • Legal, accountancy, and professional fees.

  • Service charges and ground rent.

  • Replacement of domestic items, such as furniture or carpets.

For each expense, you should record:

  • The date of the transaction.

  • The amount paid.

  • Who you paid.

  • The reason for the expense.

If the cost relates to more than one property, make sure to allocate it correctly between them.

Capital Expenses and Improvements

You must also keep records of capital expenses, which are costs that add value to the property rather than maintain it. Examples include:

  • Building an extension or conservatory.

  • Installing a new kitchen or bathroom (not just replacing like-for-like).

  • Adding insulation or structural upgrades.

These expenses cannot be deducted from rental income, but they can reduce your Capital Gains Tax liability when you sell the property.

Keep all invoices, contracts, and receipts for any capital improvements, as well as before-and-after photos if possible.

Mortgage and Finance Records

If you have a mortgage or other loan for your property, keep:

  • Mortgage statements showing interest and repayments.

  • Correspondence with your lender about refinancing or changes to the loan.

  • Proof of fees or charges paid to arrange or renew finance.

Only the interest portion of the loan qualifies for tax relief, so accurate records are essential.

Tenancy and Legal Documents

Landlords should also maintain copies of legal and tenancy documents, including:

  • Tenancy agreements and renewal contracts.

  • Deposit protection certificates.

  • Gas safety and electrical safety certificates.

  • Energy Performance Certificates (EPCs).

  • Inventory checklists and condition reports.

  • Correspondence with tenants regarding rent, repairs, or disputes.

Although not directly linked to tax, these documents may be required to support expense claims or demonstrate compliance with legal obligations.

Digital Records and Making Tax Digital

HMRC is introducing Making Tax Digital for Income Tax Self Assessment (MTD ITSA), which will affect landlords earning over £50,000 per year from April 2026 (and over £30,000 from April 2027).

Under these rules, landlords will need to:

  • Keep digital records of income and expenses.

  • Submit quarterly updates to HMRC.

  • File an annual final declaration.

To prepare, consider using accounting software such as QuickBooks, Xero, or property-specific tools like Hammock or Landlord Vision. These platforms automatically record transactions and generate reports for tax submissions.

How Long You Must Keep Records

HMRC requires landlords to keep their records for at least five years after the 31 January submission deadline for the relevant tax year.

For example, if you file your 2024 25 tax return by 31 January 2026, you must keep all supporting records until at least 31 January 2031.

If you file late or are subject to an HMRC enquiry, you may need to keep your records for longer.

Tips for Organising Your Property Accounts

  • Separate property finances: Use a dedicated bank account for all rental income and expenses.

  • Create digital backups: Scan receipts and store them in cloud-based folders.

  • Track income monthly: Record rent received and expenses as they happen, rather than at year-end.

  • Use property accounting software: Automate data entry and track profit per property.

  • Reconcile regularly: Compare your records with bank statements to ensure accuracy.

By keeping your accounts up to date, you save time when completing your Self Assessment and reduce the risk of missing deductions.

Example Scenario

David owns three rental properties and uses a letting agent for two of them. Each month, he downloads the agent statements, saves copies of invoices for repairs, and updates his spreadsheet with rent received and expenses for each property.

At the end of the year, he easily calculates his taxable profit and provides his accountant with digital records. This organisation ensures he claims every allowable expense and avoids unnecessary tax.

The Role of an Accountant

An accountant can help landlords:

  • Set up a proper record-keeping system.

  • Identify all allowable expenses to reduce tax.

  • Prepare for Making Tax Digital requirements.

  • Ensure compliance with HMRC rules.

  • Handle complex portfolios or joint ownership structures.

Having professional support gives you peace of mind and ensures you do not miss valuable tax-saving opportunities.

Conclusion

Landlords must keep accurate records of all rental income, expenses, and capital improvements to stay compliant and manage their tax efficiently. Keeping well-organised records helps you claim every allowable expense, prepare for future tax changes, and provide clear evidence if HMRC requests information.

Whether you use spreadsheets, accounting software, or an accountant, good record keeping is the foundation of successful property management and tax compliance.