Record keeping

If you receive property income, you have to keep records and keep them for 6 years. A simple single entry cash book or simple computer spreadsheet or accounting system is enough. But it must be kept up to date. You will need to keep all the necessary paperwork to back up your cash book or computerised records. It is sensible to have a hard copy of essential information in case your computerised records are damaged or lost. This includes bills you pay and copies of the rent receipts/invoice you send to your tenant. If you use a letting agent make sure you keep all the statements and other documents that they send you.

If records are poor, it will be very difficult to challenge any claims by HM Revenue and Customs during a tax enquiry that you have not included all your income or have made deductions for non-property related expenses.  Furthermore, accurate records make it much easier to actually fill out your tax return correctly and quickly.