Landlord accounting
Landlord accounting refers to the financial record-keeping and reporting obligations that arise from owning and letting rental property in the UK. It covers tracking rental income, recording allowable expenses, calculating rental profit, filing self-assessment tax returns, and, increasingly, meeting Making Tax Digital requirements. Good landlord accounting reduces tax risk, supports accurate filings, and provides the data needed to manage a property portfolio effectively.
What records landlords need to keep
HMRC requires landlords to keep records of all rental income received and all expenses incurred in connection with the letting. Income records should cover every rent payment received, including the date, amount, and property it relates to. Expense records should include receipts, invoices, and bank statements for every cost claimed, including repairs and maintenance, landlord insurance, letting agent fees, safety certificate costs, accountancy fees, ground rent and service charges, and any other allowable expenses. Mortgage interest is recorded separately as it is handled via the Section 24tax credit rather than as a deductible expense.
Records should be kept for at least five years after the 31 January filing deadline for the relevant tax year, longer if HMRC opens an enquiry. Digital records are easier to organise, search, and produce on request than paper files.
Self-assessment for landlords
Landlords whose rental income exceeds £1,000 in a tax year must register for self-assessment and file a tax return. The SA105 form is the supplementary page used to report UK property income within a self-assessment return. It captures gross rent, allowable expenses, rental profit or loss, and the mortgage interest figure for the Section 24 credit calculation. Losses in one year can typically be carried forward and offset against future property profits.
Making Tax Digital for landlords
From April 2026, landlords with gross property and self-employment income above £50,000 must move to Making Tax Digital for Income Tax. This requires keeping digital records and submitting quarterly updates of income and expenses to HMRC, followed by a final declaration after the tax year. The £30,000 threshold follows in April 2027. MTD does not change how tax is calculated, it changes how records are maintained and reported. August's MTD software for landlords handles digital record-keeping, expense categorisation, and HMRC submission in one place. Use the August rental income tax calculator to estimate your liability and see your indicative MTD start date.
Using software for landlord accounting
Most landlords find that dedicated property management software or accounting software significantly reduces the time and risk involved in landlord accounting compared to spreadsheets. August's expenses tracking feature categorises costs automatically against HMRC-recognised expense categories, links to your bank to reconcile payments, and stores receipts and invoices in the documents feature alongside gas safety certificates, EICRs, and other compliance documents, giving you a single source of truth for both accounting and compliance records.
Also see: Rental income · Rental profit · Allowable expenses · Non-allowable expenses · Revenue expenses · Deductible expenses · Self assessment · SA105 form · Making Tax Digital · Section 24 · Property income · Landlord insurance · Gas safety certificate · EICR · Landlord
