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MTD for Income Tax

What records do landlords need to keep for MTD ITSA?

The full list of records UK landlords need under Making Tax Digital for Income Tax. Income, expenses, capital items, mortgage interest, per-tenancy documents — in plain English.

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The short answer

Under MTD for Income Tax, UK landlords need digital records of every income and expense transaction, in the period it occurred, per property. Annual reconstruction of records at year-end is no longer compliant.

The records split into three groups: rental income (every payment, per property, per tenancy), allowable expenses (categorised against HMRC’s rental-property buckets), and property and tenancy documents (tenancy agreements, certificates, deposit protection, licensing).

Income

Rental income records

  • Every rent payment, recorded individually, in the period received
  • The property and tenancy each payment relates to
  • Service charges, contribution payments, and ad-hoc receipts as separate lines
  • Deposits flagged as not-income, recorded separately
  • Insurance pay-outs and compensation, recorded if rental-related

The crucial change: rent must be recorded in the period it was received, not just the period it relates to. If May’s rent arrives on 3 June, it’s a Q1 record under standard tax-year quarters, even though it covers May.

Expenses

Allowable expense records

  • Repairs and maintenance — date, property, supplier, amount, receipt
  • Letting agent fees, insurance, ground rent, service charges, accountancy fees — per property
  • Mortgage interest — tracked separately (allowable as a 20% credit, not as an expense, since April 2020)
  • Capital items — appliances, furniture replacements, improvements (treated differently from revenue expenses)
  • Travel and admin costs that directly relate to specific properties
  • Utilities, council tax, ground rent where the landlord pays them

The big trap: capital items vs revenue expenses. Replacing a broken fridge is usually a revenue expense; installing a brand-new kitchen is a capital item with different tax treatment. If you’re not sure, your accountant decides — but the record needs enough detail for them to categorise correctly.

Mortgage interest deserves its own line. Since April 2020, residential landlord mortgage interest is a 20% basic-rate tax credit, not a deductible expense. The record-keeping rule is the same; the treatment in the quarterly summary is different.

Property & tenancy documents

The documents behind the numbers

  • Current tenancy agreement (AST) for every let property
  • Deposit protection certificate from DPS, MyDeposits, or TDS
  • Gas Safety Record (CP12) — annual
  • Energy Performance Certificate (EPC) — every 10 years, with minimum-rating compliance check
  • Electrical Installation Condition Report (EICR) — every 5 years
  • Right to Rent check evidence per tenancy
  • HMO licence (where applicable)

These don’t enter your quarterly MTD submission directly, but they back up the records that do. HMRC enquiries and your own MEES / compliance work both need them. The landlord compliance dates guide covers the dates and cycles for each.

The spreadsheet question

Do spreadsheets count as “digital records”?

Strictly, yes. A spreadsheet is a digital record. But it has to meet two MTD-specific tests: every transaction logged individually in the period it occurred, and a digital linkto whatever MTD-compatible filing software your accountant uses (usually via API or CSV upload that doesn’t involve manual re-typing).

In practice, the spreadsheet route works for very small portfolios with disciplined record-keeping and an accountant who’ll do the digital-link side. For most self-managing landlords with 3+ properties, the maintenance overhead of a per-property MTD-compliant spreadsheet outweighs the cost of dedicated software.

Audit your records in 10 minutes

The MTD-Ready Records Checklist

19 items, four areas. Tick what’s ready, flag what isn’t. Free, no sales pitch.

Common questions

Questions, answered

Does MTD require a separate transaction record for every expense?+
Yes — under MTD, every transaction (income and expense) must be recorded individually in digital form, in the period it occurred. The old workflow of monthly totals or a tax-return reconstruction at year-end no longer meets the requirement.
Are paper receipts allowed?+
Paper receipts can exist, but the record of the transactionmust be digital. A scanned or photographed copy of the receipt, linked to the digital expense line, is the standard pattern. Loose paper alone won’t meet the MTD record-keeping rule.
Do I need to record the tenant’s name in the digital record?+
For income, you need enough detail to identify what was paid, when, and for which property/tenancy. Tenant names are not a hard MTD requirement, but most landlords record them anyway so the audit trail is intact.
What about deposits — are they income?+
No. A deposit is held in trust (in a deposit protection scheme) and isn’t income unless it’s applied to rent arrears or damage at end of tenancy. Record it as a separate line, flagged as not-income, so quarterly summaries are clean.
Does LandlordFlow keep these records in MTD-compatible format?+
LandlordFlow keeps them in the structure your accountant or MTD-compatible filing tool expects: per-property, per-period, with allowable-expense categorisation. We are not an HMRC-recognised MTD filing tool— your accountant or HMRC-compatible software still does the actual quarterly submission.

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