What Records Must Landlords Keep Under MTD?

The MTD Digital Records Requirement — What It Actually Means

Under MTD ITSA, you must maintain digital records of all property income and expenses throughout the year — not compile them at year end. Records must be kept in HMRC-approved software (or bridging software connected to a spreadsheet) and be updated as transactions occur.

HMRC does not require you to photograph every receipt or upload every bank statement. What it requires is that the key financial data — amounts, dates, and categories — is captured digitally and can be used to generate your quarterly update submissions.

Income Records Every Landlord Must Keep

Rental Income

• Each rental payment received — amount, date, and which property
• Advance rents received before the period they relate to
• Rent arrears received in a later period
• Payments from subletting arrangements
• Premiums received when granting a lease

Other Property Income

• Income from furnished holiday lets (FHL) — must be tracked separately
• Payments for storage, parking, or other use of the property
• Insurance claim receipts that compensate for lost rental income

Allowable Expense Records Landlords Must Keep

Repairs and Maintenance

Routine repairs and maintenance to keep the property in its existing condition are fully deductible. You must keep records showing the nature of the work, who carried it out, and the amount paid.

• Plumber, electrician, and contractor invoices
• Materials purchased for repairs
• Boiler servicing, gas safety certificates
• External decoration (maintenance, not improvement)
• Cleaning between tenancies
• Garden maintenance

Finance Costs (Section 24)

Since April 2020, mortgage interest for residential buy-to-let landlords is no longer fully deductible as an expense. Instead, you receive a 20% tax credit. Your records must still capture the full mortgage interest paid each month — this feeds into the Section 24 calculation in your quarterly update and final declaration.

Property Running Costs

• Buildings and contents insurance premiums
• Letting agent fees and property management charges
• Ground rent and service charges
• Council tax paid during void periods
• Utility bills paid by the landlord

Professional and Administrative Costs

• Accountancy fees — including AccTek’s monthly subscription
• Legal fees for tenancy agreements and lease renewals
• Advertising and tenant-finding costs
• Referencing service fees

Capital vs Revenue Expenditure — A Common Source of Errors

One of the most frequent mistakes landlords make is misclassifying capital improvements as maintenance expenses. This distinction matters for MTD because only revenue (maintenance) expenditure can be deducted against rental income in your quarterly updates.

The Replacement of Domestic Items Relief

Residential landlords can claim relief when replacing domestic items such as sofas, beds, white goods, and curtains in furnished properties. The relief covers the cost of a like-for-like replacement — if you upgrade the item, only the equivalent cost of a replacement (not the upgrade premium) is deductible. Records must show the old item replaced, the new item purchased, and the cost.

How Long Must You Keep MTD Records?

Digital records must be retained for at least 5 years and 10 months after the end of the tax year to which they relate — this aligns with HMRC’s enquiry window. For example, records relating to the 2026/27 tax year must be kept until at least 31 January 2033.

Common Record-Keeping Mistakes Landlords Make

Mixing Personal and Property Expenses

Claiming personal expenses (home broadband, personal mobile bills) as property expenses is a common error that triggers HMRC enquiries. MTD makes your data more visible to HMRC — accuracy is more important than ever.

Not Recording Void Periods

Expenses incurred during void periods (when the property is unoccupied) are still deductible. Many landlords fail to record these because there is no incoming rent to prompt data entry. Expenses such as council tax, insurance, and utility bills during void periods should always be recorded.

Pooling All Properties Together

MTD requires per-property records. Landlords who previously managed a single combined spreadsheet will need to restructure their record-keeping to track income and costs by property. AccTek configures Xero with a separate tracking category for each property during setup.

Frequently Asked Questions

Next: How quarterly reporting works in practice