HMRC treats an individual landlord and a company differently, including property finance costs. Keep receipts and expenses with the relevant owner and tax period. A mortgage repayment is not automatically an allowable expense.
Keep transactions tied to evidence
Use a consistent record for rent, costs and property activity. Bank entries alone often do not explain what a payment was for.
- Record rent due and received, refunds, insurance receipts and other rental income. Reconcile the bank and any agent statement.
- Keep supplier invoices and identify the property, date, work and payment. Separate a repair from an improvement for review rather than guessing the tax treatment.
- Track ownership and the business entity receiving income. Personal, joint and company accounts should not be mixed.
Prepare questions for the accountant
Tax treatment depends on the circumstances, including ownership, accounting basis and the nature of the cost.
- Flag mortgage interest, capital expenditure, replacement domestic items, legal costs and mixed private/business expenses for proper treatment.
- Keep acquisition and sale records separately from routine rental expenses so capital-gains or company calculations can be supported.
- Record deposits as deposits in the management records; do not treat every deposit receipt as earned rent without considering its treatment.
Retain and review
Use the applicable HMRC retention requirements and any other justified record need.
- Keep original evidence with the return calculations and explanations for adjustments. Apply the correct period for the taxpayer and return.
- Check that exports include attachments and not only totals. Test that a sample invoice can be found from the ledger.
- Review the record process before the tax deadline and before changing software or accountants. Do not delete documents needed for an enquiry or unresolved claim.
Example: one invoice covers repair and improvement
A fictional invoice includes repairing an existing roof and adding a new roof window. Ask for a clear breakdown and have the treatment reviewed. Coding the entire invoice as an ordinary repair because it came from one contractor may produce the wrong result.
What to do
- Record income and expenses with their supporting documents.
- Separate capital work, loan principal and interest for review.
- Give the accountant the ownership, finance and transaction records.
Evidence to keep
- Rent and expense records
- Invoices, statements and ownership information
Sources and guidance
- Rental profits, tax and finance costsHMRC · checked 20 October 2026
- Keeping rental income recordsHMRC · checked 20 October 2026