As a Landlord you need to keep accurate, up to date and reliable records. This lets you know exactly what is going on with your business and also ensures that you are able to accurately file your tax return at the end of the year and comply with all the HMRC requirements in relation to record keeping.
Why do I need to keep records?
It's so important for you to keep both accurate and up to date records. Having well organised records make things simple and gives you up to date information on your business. More importantly, poorly kept records can result in
- Receipts other than rent being overlooked;
- Expenditure or reliefs being claimed incorrectly;
- Missing the benefit of allowable expenditure or reliefs by not claiming what you are entitled to;
- Overlooking property disposals.
You’ll need your records to know what is going on in your business and to fill in your tax return correctly at the end of the year. If HMRC checks your tax return, they may ask for the documents to support the entries on the Return.
Should I keep manual, computerised or digital records?
There are no specific rules on how you should keep your records. We recommend keeping them digitally, in the cloud, as this is the easiest way for us to work with you to keep your records up to date. HMRC are also moving towards digital filing of information.
HMRC can charge you a penalty if your records aren’t accurate, complete and readable.
What records should I keep?
You need to keep records of the following important information:
- All the rent you receive;
- Any income from services you provide to tenants eg. charges for maintenance or repairs;
- Rent books;
- Receipts;
- Invoices;
- Bank statements;
- Allowable expenses you pay to run your property eg. cleaning or gardening.
How long should I keep my records?
You need to keep your records for at least 5 years after the 31 January tax return submission deadline of the relevant tax year.
If you send your tax return more than 4 years after the deadline, you’ll need to keep your records for 15 months after you send your tax return.
What do I do if my records have been lost, stolen or destroyed?
If you can't replace your records then you need to do your very best to provide figures. When you file your tax return you will need to tell HMRC if you are using either estimated or provisional figures.
Estimated figures are just your best guess if you have no way of arriving at the actual figures.
Provisional figures are just temporary estimates whilst you wait for your actual figures. Once you arrive at the actual figures you will need to replace the provisional estimates.
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