The short answer, in plain words
The best way is the one where every payment is recorded once, against the right property, within days of it happening, with the receipt kept beside it and a tax category on it. The tool matters less than that habit. What good software does is shrink the habit to confirming what it has already filled in.
When it bites: January with a carrier bag of receipts
It is the middle of January and the Self Assessment deadline is days away. The boiler repair from March is an attachment in an email you cannot find, the agent’s statements show only what reached your account after their fee, and two of the properties’ costs have been paid from your personal card. Each missing receipt is a cost you either cannot claim or cannot prove.
Making Tax Digital moves the deadline closer. Once it applies to you, the records have to be digital as you go and a cumulative update goes to HMRC four times a year. For landlords, qualifying income over £50,000 in the 2024 to 2025 tax year brings you in from 6 April 2026, over £30,000 in 2025 to 2026 from 6 April 2027, and over £20,000 in 2026 to 2027 from 6 April 2028.
How to track income and expenses, step by step
- Use a separate bank account for the lettings if you can. It is not required, but it turns the monthly check into minutes
- Use categories that match the SA105 property pages: rents (box 20), rent, rates, insurance and ground rents (24), repairs and maintenance (25), legal, management and professional fees (27), services you provide to tenants, such as cleaning or gardening (28), other costs (29), replacing domestic items (36) and residential finance costs (44)
- Below £90,000 of UK property income before expenses, a shortcut is allowed: the SA105 notes let your expenses, other than residential finance costs, go in box 29 as one total, and GOV.UK’s “Create digital records” lets each record be marked simply as income or expense, with any residential finance cost flagged
- Record the full rent the tenant paid, even when an agent took a fee first, and record the fee as a cost
- Photograph paper receipts on the day and keep the email invoices with the entry
- Once a month, go through the bank statement and match every line to an entry, or decide it has nothing to do with the lettings
- Keep improvements apart from repairs, and mortgage interest apart from other costs, because neither is treated as an ordinary expense
Your options, compared honestly
A spreadsheet. Free, flexible and fine for one or two properties. It relies on you typing every line, it has no idea which rent is late, and once Making Tax Digital applies it needs bridging software to send the updates. The LetCompliance blog compares a spreadsheet with landlord software in more depth.
An accountant with the paperwork. You hand over statements and receipts once a year and pay for the hours spent sorting them, and you see the numbers months after the year has closed.
General accounting software. Xero lists its Ignite plan at £18 a month plus VAT after an introductory offer, and describes all its plans as ready for Making Tax Digital for Income Tax (Xero’s UK pricing page, read 20 October 2026). It is accounting software for businesses of every kind, not just lettings.
Landlord accounting software. Landlord Vision lists a Starter plan at £7.99 a month plus VAT, shown as 60% off for two years, priced by the number of tenancies, with bank feeds through Open Banking (its home and pricing pages, read 20 October 2026). It goes further than LetCompliance on the accounting side.
Landlord software that runs the let as well. The income and costs come out of running the tenancy: the rent you mark paid or collect, and the repairs and receipts you record against each home. That is LetCompliance.
How it works in LetCompliance
Finance. Income against costs for each property and for the whole portfolio, on the UK tax year from 6 April to 5 April, with repeating expenses and a view of the next 90 days.
Rent records itself. When you mark a rent payment as paid on the Rent page, or it is collected by Direct Debit, the income is entered in Finance for that property without retyping. Stripe’s fee on a Direct Debit is entered as an expense on its own line.
Receipts from a photo. Photograph a receipt or upload an invoice and it is read into a draft expense with the supplier, amount, date and SA105 category. Nothing counts until you confirm it. If a receipt cannot be read, it is filed as a draft for you to fill in.
Bank statements. Download a CSV from your online banking and each line is matched to a rent charge, an existing entry or a new one. Save rules for the payees that come round every month. When an agent pays you the rent less its fee, enter the fee on that line and the full rent and the fee are recorded separately. For a mortgage payment you enter the interest part, which is what counts as a finance cost. Importing the same statement twice adds nothing twice.
At the year end. On paid plans the SA105 tax pack sets out your figures box by box, with the Section 24 finance cost calculation. Making Tax Digital updates for UK property income are sent from the same records on every paid plan.
Your accountant. Send them a read-only link with no login, on any plan, or export a Xero-ready CSV from Finance.
What it costs. Finance, with receipt reading and bank statement import, is open on the trial and on paid plans: Single at £7.99 a month for one property, Solo at £14.99 for up to 3 and Portfolio at £19 for up to 10, with larger plans above that.
What the rules say
GOV.UK’s “Keeping your pay and tax records: rental income” (read 20 October 2026) says to keep the dates you let the property, all the rent you get, any income from services you give tenants, your rent books, receipts, invoices and bank statements, and the allowable expenses you pay to run the property.
GOV.UK’s “Renting out your property: paying tax and National Insurance” (read 20 October 2026) says the first £1,000 of property income is tax-free, lists allowable expenses such as letting agents’ fees, accountants’ fees, insurance, maintenance and repairs (but not improvements), utility bills, ground rent and service charges, Council Tax and services such as cleaning or gardening, and says allowable expenses do not include capital expenditure.
On how long to keep them, the longer rule is the one for landlords. Section 12B of the Taxes Management Act 1970 treats a person letting property as carrying on a trade for record keeping, so the records are kept until the fifth anniversary of the 31 January filing deadline for the year (legislation.gov.uk, read 20 October 2026). For Making Tax Digital, GOV.UK’s “If your circumstances change” (updated 16 October 2026) says the same: at least 5 years from the submission deadline for each tax year. The 22 months on GOV.UK’s general records page is not the period to use for rental records.
Common mistakes
- Recording the net amount an agent paid you as the rent, which hides the agent’s fee and understates your income
- Treating the whole mortgage payment as a cost. Only the interest is a finance cost, and on a residential let it goes in its own box (44) rather than with your other expenses
- Calling an improvement a repair, such as a new kitchen that replaces a basic one with a better one
- Adding up all the properties together, so a joint property or a sale later cannot be separated out
Is there an app to scan receipts for a rental property?
Yes. In LetCompliance you photograph the receipt and it is read into a draft expense with the property, amount, date and tax category for you to confirm. It works on the trial and on paid plans.
Do I need an accountant if I use landlord software?
Not always. Software prepares the figures from your records, and a landlord with straightforward lets can send their own return. An accountant earns their fee on capital gains, company structures, losses or mixed income. If you use one, give them a read-only link rather than a carrier bag.
What LetCompliance does not do here
- It is not double-entry accounting: there is no balance sheet, no VAT return and no company accounts. Landlord Vision or Xero go deeper on the accounting side
- There is no live bank feed. Statements come in as CSV files you download from your bank
- There is no live connection to Xero or QuickBooks, only a Xero-ready CSV export
- The SA105 tax pack is on paid plans, not in the trial
- Making Tax Digital covers UK property income only
