Letting Agent Statements and Property Bookkeeping for Landlords

A letting agent statement is the main source document for a managed rental property, but it is not a complete bookkeeping record on its own. Landlords need to record the gross rent collected, each fee and repair charge separately, and the payment that reached the bank account. Under Making Tax Digital for Income Tax, these records must be digital and ready in time for each quarterly update to HMRC.

This article explains what a statement contains, how to record it, which agent charges can be deducted and how the Making Tax Digital rules apply.

TL;DR

• Record the gross rent shown on the statement, not only the net amount paid to the landlord. Fees and repairs are entered as separate expenses.
• Letting agent and management fees are deductible from rental income when they are wholly and exclusively for renting out the property.
• Landlords in scope of Making Tax Digital keep digital records and send quarterly updates. The landlord, not the agent, is responsible for this unless the agent is authorised to act.
• Rental records must be kept for at least 5 years after the 31 January deadline for the relevant tax year.
• Each statement should be matched to the bank statement and to the invoices behind any deductions.

Table of Contents

• What a letting agent statement shows
• Why the net payment is not the record
• Recording each line of a statement
• Are letting agent fees tax deductible?
• What Making Tax Digital changes
• A monthly routine for statements
• Records to keep alongside statements
• Common errors with agent statements
• Keeping statements, receipts and quarterly updates in one place
• FAQ
• Sources

What a letting agent statement shows

A statement summarises what the agent did with client money for one period, usually a month. Layouts differ between agents, but most cover the same items:

• Rent received from the tenant, with the date and the period it covers.
• The agent’s management or collection fee, often a percentage of the rent.
• Other agent charges, such as tenant-find fees, inventory fees, renewal fees or check-in and check-out reports.
• Repair and maintenance costs paid on the landlord’s behalf, usually with a contractor invoice attached.
• Any other deductions, such as safety certificates or insurance paid through the agent.
• The net sum transferred to the landlord, and the opening and closing balance held by the agent.

The net transfer is the figure that appears in the landlord’s bank account. It is also the figure that causes most bookkeeping errors, because it hides the income and the costs that sit behind it.

Why the net payment is not the record

HMRC expects rental income to be reported in full. When an agent deducts fees before paying the landlord, the full rent is still the landlord’s income, and the fees are claimed as expenses. The National Residential Landlords Association advises landlords to ask agents for statements in a standard digital format, such as CSV or Excel, and to make clear that HMRC requires gross rent with commission and management fees listed separately.

A simple example shows the difference. Rent for the month is £1,000. The agent charges a management fee and takes £120 for a boiler repair. The landlord receives £780 net.

Entering only £780 as income would understate income and lose the record of what was spent. It would also leave nothing to explain the figure if HMRC asked about it.

Recording each line of a statement

The expense categories used for digital records are set by HMRC’s reporting structure. The Low Incomes Tax Reform Group lists them for landlords: rent, rates, insurance and ground rents; property repairs and maintenance; legal, management and other professional fees; costs of services provided; other allowable property expenses; costs of replacing domestic items; and the interest element of residential finance costs. Non-residential property finance costs have their own category.

Most agent statement lines map to these categories as follows:

The category decides how the cost appears in the quarterly update, so each line is entered on its own rather than as one combined deduction. A repair that improves the property rather than restoring it can be a capital item, which is treated differently. A landlord unsure about a large job asks an accountant before entering it.

Are letting agent fees tax deductible?

Yes, in most cases. HMRC’s guidance on working out rental income says that letting agent fees and management fees can be deducted when they are wholly and exclusively for the purposes of renting out the property. In practice that covers fees for finding a tenant, collecting rent and managing the property.

Three points help with the records:

1. The fee has to relate to the rental property. A fee for a property the landlord lives in, or a service for another purpose, does not qualify.
2. Where an agent charges VAT on its fees, the amount shown on the invoice is the cost recorded, because a landlord letting residential property is not normally VAT registered for it. Ledgery does not support VAT, so VAT-registered businesses need separate arrangements.
3. Costs for work that mixes private and rental use need splitting. Ledgery’s guide to personal and business expenses covers how that split works for sole traders, and the same principle applies to mixed-use costs.

Finance costs follow different rules from agent fees. A landlord who paid a lender’s arrangement fee can read about the treatment in the guide to mortgage arrangement fees and tax. Bank charges on the account that receives the rent are covered in bank charges and HMRC.

What Making Tax Digital changes

Making Tax Digital for Income Tax began on 1 April 2026 under The Income Tax (Digital Obligations) Regulations 2026. People in scope keep records digitally, use compatible software to send quarterly updates of income and expenses, and then file the annual return.

Who is in scope depends on combined gross income, not profit. HMRC’s update notice says that from April 2026 the threshold is total self-employment and property income above £50,000, falling to above £30,000 from April 2027 and above £20,000 from April 2028. ICAEW notes that the start date is set by combined total income from sole trades and property businesses. A landlord who receives rent of £35,000 through an agent, with fees and repairs taken first, counts the gross £35,000.

The government expects the 2028 reduction to bring approximately 970,000 additional sole traders and landlords into the system. Landlords below £50,000 today may therefore be affected within two years. The official pages give the dates for each quarterly deadline and are the right place to check the current schedule.

Timing: when the agent’s information must be recorded

The Association of Taxation Technicians sets out a useful concession in its technical FAQs. Digital records from letting agent information do not have to be created until the information is received, but they must be ready in time for each quarterly update. The same page says that if only a net figure is available during the year, it may be used for the digital records and quarterly updates, with an adjustment made at or before the tax return.

This helps agents who only issue annual summaries, but it is a fallback. The Low Incomes Tax Reform Group makes the practical point that the landlord carries the responsibility for the digital record, so a landlord should ask the agent for statements more often if the agent only provides annual summaries. The agent also cannot send quarterly updates for the landlord unless authorised as a supporting agent.

Separate records for different income

A landlord who is also self-employed keeps property income apart from trading income, because HMRC treats them as separate sources. Ledgery handles both in one account, with the two sets of records held separately.

A monthly routine for statements

A short routine each month keeps the quarterly update from becoming a large catch-up task.

1. Download the statement when the agent issues it, preferably as a CSV or Excel file as well as a PDF.
2. Enter the gross rent against the period it covers.
3. Enter each fee and each repair as its own expense in the right category.
4. Attach the contractor invoice for every repair deduction.
5. Compare the net transfer on the statement with the matching line in the bank account.
6. Check that the agent’s closing balance equals the next statement’s opening balance.
7. Note any missing rent, arrears or a deposit movement, which are not income in the same way as rent.

Tenant deposits held in a protection scheme are not rental income. They should not be entered as rent unless part is kept at the end of the tenancy, and that point is worth confirming with an accountant when a deposit dispute arises.

A separate bank account for the property also makes matching simpler. Ledgery’s article on a separate bank account for a sole trader explains why separation helps, and the same reasoning holds for rental income.

Cash or accruals

The basis used to record income decides when rent counts. Most small landlords use the cash basis, where income is recorded when received and expenses when paid. The guide to cash versus accruals sets out the difference. With an agent, the date the rent reaches the agent and the date it reaches the landlord can differ, so the basis chosen needs to be applied consistently.

Records to keep alongside statements

Statements alone do not meet the record-keeping rules. HMRC’s guidance says landlords should keep details of the dates the property was let, all rent received, any income from services given to tenants, rent books, receipts, invoices, bank statements and allowable expenses.

On how long to keep them, the rental income guidance says records must be kept for at least 5 years after the 31 January tax return deadline for each tax year. HMRC may charge a penalty if records are inaccurate, incomplete or unreadable, or are not kept for the required period.

Practical points on retention:

• Keep a copy of every statement, even when the agent can reissue it, because an agent may change or close its portal.
• Keep the contractor invoice that supports each repair line.
• Keep the bank statement that shows each transfer from the agent.
• Keep any change of agent paperwork, including the final statement and the transfer of any balance held.

Making a photo of a paper invoice and storing it with the entry is enough for most receipts, as long as the image is readable.

Common errors with agent statements

• Recording the net payment as income, which omits fees and repairs.
• Entering the agent’s fee and the repair deduction as one lump sum.
• Missing a statement for a month when the rent was paid late.
• Counting a deposit as rent.
• Entering a repair twice, once from the statement and once from the contractor’s invoice.
• Recording a statement for the wrong tax year around 5 April, when a statement period crosses the year end.

The last point matters because a statement period often runs from mid-month. Rent received on or before 5 April belongs in one tax year and rent received after it belongs in the next.

Our view on statements and software

Letting agent statements are accurate for the agent’s purposes, but they were not designed as tax records. The figure that matters to HMRC is spread across several lines, and each line has to land in the right category.

We built Ledgery to bring this work into one place. Receipts and contractor invoices are scanned with AI-powered receipt scanning and stored with the record. Open Banking feeds bring in the rent transfers, so the statement can be compared with what arrived in the account. Property income and self-employment income are both supported, and quarterly updates are generated from the records. Filing to HMRC stays under the user’s control.

Accountant access is part of the platform, so an accountant or bookkeeper can be invited to review the records without paying for a seat. Deadline reminders give notice before each quarterly update is due.

We believe the best record is the one made when the statement arrives. A short routine each month, with the tools to make it quick, keeps the quarterly update to a review rather than a project.

The Ledgery Team

Keeping statements, receipts and quarterly updates in one place

Ledgery is income tax software for UK self-employed people and property owners. It stores income and expense records, scans receipts, creates invoices, sends deadline reminders and generates quarterly updates for HMRC. It supports sole trader and property income. It does not support limited companies or VAT. The first quarter is free, after which a monthly or annual subscription applies. The plans are Simple, Grow and Pro, and details are on the Ledgery plans page.

Landlords who already receive monthly statements can enter each one as it arrives, then let the quarterly update draw on those records.

FAQ

Should a landlord record the gross rent or the amount the agent pays over?

The gross rent should be recorded as income, with the agent’s fees and other deductions entered as expenses. HMRC requires full rent to be reported with fees claimed separately. The net figure is useful only to match the payment against the bank account.

Can a landlord use a net figure in quarterly updates?

If gross income and deductions are not available during the year, the Association of Taxation Technicians says the net figure may be used for digital records and quarterly updates. An adjustment is then made at or before the tax return. Asking the agent for itemised statements avoids the adjustment.

Can the letting agent send the quarterly updates?

Not by default. The Low Incomes Tax Reform Group states that an agent cannot file quarterly returns unless authorised as a supporting agent. Without that authority, the landlord is responsible for the digital records and the updates, or can appoint an accountant to act.

How long should letting agent statements be kept?

At least 5 years after the 31 January tax return deadline for the tax year they relate to, according to HMRC’s rental income guidance. Contractor invoices and bank statements that support the statement should be kept for the same period.

Is the VAT on letting agent fees deductible?

For a landlord not registered for VAT on rental income, the VAT charged by the agent is part of the cost and is included in the fee claimed. Landlords who are VAT registered for other activities should take advice from an accountant, since Ledgery does not support VAT.

Sources

• Work out your rental income when you let property, GOV.UK
• Keeping your pay and tax records: Rental income, GOV.UK
• Making Tax Digital for Income Tax: update notice, GOV.UK
• Reduction of the mandation threshold from £30,000 to £20,000 from April 2028, GOV.UK
• The Income Tax (Digital Obligations) Regulations 2026, legislation.gov.uk
• Making Tax Digital for landlords, Low Incomes Tax Reform Group
• Making Tax Digital technical FAQs, Association of Taxation Technicians
• Making Tax Digital: are you and your agent on the same page?, NRLA
• Prepare for 2026/27: Businesses, ICAEW

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• Bank Charges and HMRC: What Self-Employed People and Landlords Can Claim
• Mortgage Arrangement Fees and Tax: What UK Landlords Can Claim