DIY landlord accounting: a plain guide for UK landlords who do their own books

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This is general information from GOV.UK, not tax advice. Gaffy is not accounting software.

Download the free spreadsheet (XLSX)

You can do your own records. Plenty of landlords do, and then either file Self Assessment themselves or hand a tidy pack to an accountant. The legal bit is the records and the return, not a particular brand of software. Everything below is taken from GOV.UK. If your affairs are not simple, pay someone who does this for a living.

What records to keep

GOV.UK's page on working out your rental income says you must keep accurate records of rent received and the expenses you incur. The records it lists include rent books, receipts, invoices, bank statements and mileage logs for journeys that are only for the property business. Keep income from fully furnished lets separate from unfurnished or partly furnished lets.

You must keep the records for at least 5 years after the 31 January tax-return deadline for that tax year. HMRC can charge a penalty if the records are not accurate, complete and readable, or if you do not keep them long enough. The same retention point is on keeping records: rental income.

Rental income is the rent, plus payments for furniture, and charges for services you provide such as cleaning of communal areas, hot water, heating and repairs. If you let more than one UK property, the profits and losses are added together into one property business. Overseas property is kept separate. Joint owners are taxed on their share. Married couples and civil partners who live together are usually taxed in equal shares unless they have declared a different split.

A property allowance of up to £1,000 a year exists. If you claim it, you cannot also deduct your expenses. Read that section on the same GOV.UK page before you pick one.

Allowable expenses and capital improvements

You can deduct expenses that are wholly and exclusively for renting out the property. GOV.UK's list includes:

  • general maintenance and repairs
  • water rates, council tax, gas and electricity
  • insurance, such as buildings, contents and public liability
  • costs of services, including wages of gardeners and cleaners
  • letting agent and management fees
  • legal fees for lets of a year or less, or for renewing a lease of less than 50 years
  • accountant's fees
  • rents if you are sub-letting, ground rents and service charges
  • direct costs such as phone calls, stationery and advertising for new tenants
  • vehicle running costs for the rental business, including mileage rate deductions

You cannot deduct enhancements or improvements, which are capital, unless a relief such as replacement of domestic items applies. You cannot deduct the full mortgage payment. You cannot deduct private phone calls, clothes, or anything that was not incurred solely for the rental business. Where only part of a cost is for the rental, you deduct that part.

A repair puts something back to its original condition. GOV.UK's examples include replacing roof tiles blown off in a storm, replacing a broken-down boiler, and redecorating between tenants. Replacing a part with the nearest modern equivalent can still be a repair, such as a single-glazed window with a double-glazed one, where the improvement is incidental. Adding an extension, installing a security system that was not there before, or replacing a kitchen with one of a higher specification are given as capital costs. Capital costs are not deducted from rent. Keep the records anyway, because they can matter for Capital Gains Tax if you sell.

Replacement of domestic items is a separate relief, from 6 April 2016, for things like movable furniture, curtains, carpets and household appliances provided for the tenant. It is not for the first time you buy them, and it is not the full cost if the new item is an improvement on the old one. The GOV.UK page has the steps.

The spreadsheet's Expenses tab uses those headings: rent, rates, insurance and ground rents; property repairs and maintenance; legal, management and other professional fees; costs of services provided, including wages; other allowable property expenses. Those names follow the way the SA105 UK property pages group expenses. Check the current SA105 notes before you file. Do not type residential mortgage interest into the expenses tab.

Mortgage interest

From 6 April 2020, income tax relief on finance costs for residential property is restricted to the basic rate. It is a tax credit, not a deduction from rental profit. GOV.UK sets this out on the same rental-income page, under changes to tax relief for residential property.

Finance costs include interest on mortgages, on loans (including loans to buy furnishings) and on overdrafts, plus fees and other incidental costs of getting or repaying those loans. UK companies are outside this restriction and still deduct interest in the usual way. If a loan is partly for a residential let and partly for something else, you apportion it.

The spreadsheet has a separate Mortgage interest tab for this reason. Record the interest, not the whole payment. The capital part of the payment is not relief. Basic-rate relief is something your return or your accountant works out. The sheet only stores the figure you will need.

Cash basis

GOV.UK says landlords with property-business income can use the cash basis, rather than traditional accounting, to work out taxable profit. If you meet the criteria and you do not want to use it, you opt out by checking the box on the return. Cash basis, in plain terms, follows money in and money out. Read the cash basis section on working out your rental income and use it only if it matches how you actually keep the books.

Making Tax Digital

As of 2026, from 6 April 2026, sole traders and landlords must use Making Tax Digital for Income Tax if their total annual income from self-employment and property is over £50,000. The source is HMRC's step by step collection. The test is qualifying income, not the number of properties. HMRC does not provide the software.

You need compatible software to create and store digital records of property income and expenses, to send quarterly updates, and to submit the tax return. A spreadsheet can be the place you keep the records. On its own it does not send the update. HMRC's software finder describes software that connects to records kept in spreadsheets. HMRC says this is sometimes called bridging software. Use the finder to see what is available. Gaffy is not bridging software.

If you are under the threshold, this section is something to know about, not a bill you have to pay this year. Check the GOV.UK tool for your own date rather than guessing from a portfolio size.

The 2026 and 2027 thresholds are set out in Making Tax Digital for landlords. Gaffy and Hammock is how the repairs side sits next to an accounting tool.

Free spreadsheet

The download on this page is an .xlsx file. No email. Open it in Excel or LibreOffice, or upload the file into the spreadsheet tool you already use.

The tabs are Income, Expenses, Mortgage interest, Mileage, Per-property summary and Year summary. Type a property name the same way on every tab. The per-property sheet has 15 rows: put the name in column A and it sums income, allowable expenses, finance costs and miles from the other tabs. The year sheet sums the columns. The mileage tab records miles only. GOV.UK allows mileage-rate deductions for business motoring. Take the current rate from GOV.UK when you do the return.

The categories on the Expenses tab are listed in column H. Residential finance costs stay on the Mortgage interest tab. Nothing in the file is a tax return.

A monthly 20-minute routine

Once a month, when you are not in the middle of a repair:

  1. Download the bank transactions for the lets, or tick them off a statement.
  2. Put each rent receipt on Income, against the property.
  3. Put each allowable cost on Expenses, with the category and where the receipt is.
  4. Put mortgage interest, when the lender shows it, on the Mortgage interest tab. Do not wait until January and guess.
  5. Add any property-only mileage.
  6. Glance at the year summary. If a property shows rent and no expenses, you have probably forgotten a receipt, not discovered a miracle.

Twenty minutes is a habit, not a claim that your portfolio will take twenty minutes. The point is a date in the diary. A Saturday in January is how records go missing.

When to get an accountant, or move to software

Get an accountant when there is a limited company, a sale, a year you do not understand, overseas property, or simply when you do not want to file. Software is worth it when the spreadsheet is something you dread opening, or when Making Tax Digital means you need a submission tool. The comparison of accounting tools we actually priced is best landlord software UK. Expense tracking, what you can claim, repairs versus improvements, and the return itself are in landlord expenses, allowable expenses for landlords, repairs that are tax deductible and the landlord tax return. If you want the "you do not need a full accounting suite for the repairs" version, that piece is self-managing without a full accounting suite.

A maintenance template is a different record, and it still helps the accounts: maintenance request template. The invoice for the job is what the Expenses tab is waiting for.

Where Gaffy helps

Gaffy does not do landlord accounting. It does not file Making Tax Digital, calculate profit, or store your mortgage. What it does is keep the repair history and the invoices on the property, so that when you sit down for the routine above you can find the boiler invoice without searching a chat. That is the whole overlap. The books stay in this spreadsheet, in proper accounting software, or with your accountant.

DIY landlord accounting FAQs

Can I do my own accounts as a landlord?

Yes. Many landlords keep their own records and file Self Assessment, or hand a tidy pack to an accountant. You must keep accurate records. This page is general information from GOV.UK, not advice for your return.

What expenses can landlords claim?

GOV.UK says you can deduct expenses that are wholly and exclusively for renting out the property, including repairs, insurance, agent fees, and services such as cleaning. Improvements and the full mortgage payment are not deducted in the same way. Read the list: https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income

Do landlords need accounting software?

Not by itself. You need records. Software is one way to keep them, a spreadsheet is another, and an accountant can use either. From 6 April 2026, Making Tax Digital for Income Tax applies if your qualifying income is over £50,000, and then you need compatible software to submit.

Can I use a spreadsheet for Making Tax Digital?

You can keep records in a spreadsheet. To send them to HMRC you need compatible software. HMRC says software that connects to records kept in spreadsheets is sometimes called bridging software. HMRC does not provide it. Use the software finder: https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-income-tax

Does Gaffy do landlord accounting?

No. Gaffy is not accounting software and it does not file Making Tax Digital updates. It keeps repair history and invoices by property, which makes the pack you give your accountant easier to find.

Sources

All of the tax points above are from these GOV.UK pages, read on 19 October 2026. This is general information, not tax advice.