What Are Digital Records Under MTD and How Can Landlords Comply?

Making Tax Digital (MTD) has transformed how landlords manage their rental income and expenses. Central to compliance is the requirement to maintain digital records.

HMRC defines digital records as records that are stored electronically and linked digitally, so they can be used for MTD-compliant submissions.

Many landlords misunderstand what qualifies, assuming that spreadsheets, paper ledgers, or even scanned bank statements are sufficient. The truth is, if your records aren’t fully digital and properly linked, you could face errors or penalties.

What Counts as Digital Records?

According to HMRC’s MTD guidance, digital records must include:

Rental Income

• Amount received for each payment.
• Date received to track the correct accounting period.
• Property details to distinguish between multiple rentals.

Expenses

• Description of the expense (e.g., repairs, insurance, utilities).
• Amount paid for each item.
• Receipts or invoices stored digitally to prove the expense.

Property Details

• Information about each property in your portfolio, including address and identifiers, to accurately allocate income and expenses.

These records must be maintained in a digital format that is capable of being submitted to HMRC directly or via compatible software (like Landlord Studio).

HMRC guidance emphasises that digital records are the foundation of MTD compliance. Without them, landlords cannot submit their returns in a fully compliant way.

What Doesn’t Count

Not all records qualify as digital under MTD:

• Paper ledgers – writing down your transactions on paper does not meet MTD requirements.
• Excel spreadsheets without bridging software – a standalone spreadsheet does not create the digital links HMRC expects.
• Bank statements – while they are helpful for reconciliation, you do not submit them, and they do not replace proper digital records.

Understanding what doesn’t count is just as important as knowing what does. Using non-compliant methods can result in mistakes and potential penalties.

Scenarios

Small Portfolio

A landlord with two flats may record rental income manually in compliant software. Each payment is logged with the amount, date, and property, while expenses are uploaded as digital receipts. Even a small portfolio benefits from proper digital records by minimising errors.

Larger Portfolio

Landlords managing multiple properties can automate the process further. Bank feeds automatically pull income and expenses into software, while receipts can be uploaded directly via mobile app. This ensures all records are properly linked and HMRC-ready, even across dozens of properties.

Benefits of Digital Records

Maintaining digital records offers clear advantages:

• Accuracy: Automated calculations reduce the risk of errors.
• Time saved: Less manual entry and easier reconciliation of income and expenses.
• Reduced risk of penalties: Compliant digital records mean fewer mistakes and easier reporting to HMRC.

How Landlord Studio Helps

Landlord Studio makes MTD compliance straightforward for landlords of any size portfolio:

• Streamlined digital record-keeping for fast, accurate accounting.
• Digital receipts stored securely for every expense.
• Mobile app for capturing income and expenses on the go.
• Built-in bank feeds to automatically track rental payments and outgoings.

With these tools, landlords can ensure all records are fully digital, properly linked, and MTD-ready without the stress of manual spreadsheets.

What Are Digital Records Under MTD? Final Words

Setting up a reliable system for digital records is no longer optional—it’s essential for MTD compliance. Landlords who act now can avoid errors, save time, and reduce the risk of penalties.

Create your free Landlord Studio account today and see how easy it is to maintain fully compliant digital records for your rental portfolio.