Landlord records: what HMRC expects you to keep for rental income

If you let out a property you own personally, you pay Income Tax on the profit: rent in, minus allowable expenses. Every expense you claim needs a record behind it, and HMRC can charge a penalty if your records aren't accurate, complete and readable, or aren't kept for long enough.

Here is what to keep, what you can and can't claim, and how Making Tax Digital changes the picture for larger landlords.

Allowable expenses and the records behind them#

Allowable expenses are costs of the day-to-day running of the property:

• letting agents' fees;
• legal fees for lets of a year or less, or for renewing a lease for less than 50 years;
• accountants' fees;
• buildings and contents insurance;
• maintenance and repairs, but not improvements;
• utility bills, such as gas, water and electricity, where you pay them;
• rent, ground rent and service charges;
• Council Tax, where you pay it;
• services you pay for, such as cleaning or gardening;
• other direct costs of letting, such as phone calls, stationery and advertising.

For each one, keep the invoice or receipt and the bank statement that shows it was paid.

Mortgage interest#

You can never claim the whole mortgage payment, only the interest. And for individual landlords of residential property, relief on finance costs, including mortgage interest, has been restricted to the basic rate of Income Tax since 6 April 2020, rather than deducted in full from rent. The record you need is your lender's statement showing the interest charged for the year.

What you can't claim, but should still keep#

Capital expenditure, such as adding an extension, installing a security system where there wasn't one, or replacing a kitchen with a higher-spec one, isn't an allowable expense. Keep the records anyway: capital costs may reduce Capital Gains Tax when you sell. See tracking renovation costs for how to tell repairs from improvements.

There is a middle ground for furnished lets. Replacement of domestic items relief covers replacing items such as beds, sofas, curtains, carpets, fridges, crockery and cutlery, provided the new item is for tenants' use and the old one is no longer used in the property. Keep the receipt for the replacement.

Small amounts of rental income#

The first £1,000 of property income is tax-free under the property allowance. If you claim it, you can't deduct your expenses as well, so it only makes sense when your costs are low.

Above that:

• between £1,000 and £2,500 a year, contact HMRC;
• more than £2,500 after expenses, or £10,000 before them, report it on a Self Assessment return. If you don't usually file one, register by 5 October after the tax year you had the income.

Making Tax Digital#

From 6 April 2026, landlords and sole traders with qualifying gross income over £50,000 must keep digital records and send quarterly updates to HMRC through compatible software. From 6 April 2027 the threshold falls to £30,000. If you're heading into it, capturing receipts as they come in, rather than in a shoebox at the end of the year, is what makes quarterly updates bearable. See Making Tax Digital and receipts.