For many landlords, “digital record-keeping” still sounds like one of those vague compliance phrases that HMRC likes to use without fully explaining. You may have seen references to spreadsheets, scanned receipts, quarterly updates and digital links — and wondered what actually applies to you.
With Making Tax Digital for Income Tax (MTD for IT) approaching, the rules around digital records are no longer theoretical. They will directly affect how you track rent, log expenses and report your property income to HMRC.
But here’s the key point: HMRC’s requirements are more specific — and in some ways simpler — than many landlords think.
In this guide, we’ll break down:
- What counts as a “digital record” under MTD
- The most common myths (spreadsheets, scanned receipts and PDFs)
- How often your records actually need to be kept up to date
Whether you manage one buy-to-let or a growing portfolio, understanding the rules now will save you stress — and potentially penalties — later.
Why digital record-keeping matters under MTD
Under MTD for Income Tax, landlords with qualifying income above the threshold will need to:
- Keep digital records of their property income and expenses.
- Submit quarterly updates to HMRC using compatible software.
- Submit a Final Declaration each year.
The foundation of all of this is digital record-keeping. If your records don’t meet HMRC’s definition of “digital”, everything else becomes more complicated.
For readers of LandlordMTD.co.uk — who are already thinking about how to prepare for MTD — the practical question is not whether digital record-keeping is required, but what it actually looks like in day-to-day property management.
What counts as a “digital record” under MTD?
Let’s start with HMRC’s core requirement.
Under MTD, landlords must keep certain information in electronic form using MTD-compatible software. That includes:
- The amount of income received
- The date the income was received
- The category of income (e.g. residential rent)
- The amount of each expense
- The date the expense was incurred
- The category of expense (e.g. repairs, mortgage interest, insurance)
The records must be stored digitally and maintained in a way that allows information to be sent directly to HMRC through software.
In other words:
- Writing figures in a notebook and typing them into software at year-end does not meet the requirement.
- Manually retyping totals into an HMRC portal (once MTD applies to you) will not be permitted.
The key principle: digital from the point of entry
HMRC’s approach is about maintaining a digital journey from your original records through to submission.
This means:
- Transactions are recorded digitally.
- Totals are generated digitally.
- Data is submitted digitally.
There should be no manual “copy and paste” between systems unless there is a compliant digital link in place.
For landlords, this usually means using dedicated accounting software that records income and expenses as they happen and prepares quarterly updates automatically.
A purpose-built platform like Hammock is designed specifically around landlords’ property finances. Rather than adapting generic bookkeeping systems, it tracks rental income, mortgage payments, fees and property-specific costs in a format aligned with HMRC’s reporting categories — keeping everything compliant by default.
Myth 1: “I can just use a spreadsheet”
This is one of the most common questions landlords ask.
The short answer is: yes, spreadsheets can count as digital records — but only in certain circumstances.
When spreadsheets are allowed
HMRC does not ban spreadsheets outright. If you:
- Keep your income and expense records in a spreadsheet, and
- Use bridging software that can submit data digitally to HMRC,
then you may be compliant.
However, there are two important caveats:
- The spreadsheet must contain all required data fields (dates, categories, amounts).
- The transfer of data to HMRC must be done through compatible software with a digital link — not by manually retyping totals.
The practical reality
While spreadsheets are technically permitted, they come with risks:
- Formula errors
- Version control problems
- Manual categorisation mistakes
- Time-consuming quarterly processes
- No automatic bank feeds
As portfolios grow, spreadsheets often become fragile systems held together by habit.
More importantly, MTD introduces quarterly reporting. Updating and reconciling spreadsheets four times a year — rather than once — increases the administrative burden significantly.
That’s why many landlords are moving away from spreadsheets towards dedicated platforms built around property accounting.
A landlord-focused platform like Hammock connects directly to your bank feed, automatically imports rental transactions, categorises them correctly and prepares MTD-ready updates without relying on manual formulas.
Spreadsheets may be allowed — but they’re rarely the most resilient solution.
Myth 2: “If I scan my receipts, I’m compliant”
Scanning receipts is good practice. But it’s not the same thing as digital record-keeping under MTD.
Here’s the distinction:
- A scanned receipt is evidence of a transaction.
- A digital record is structured data about that transaction.
HMRC requires the transaction details to be recorded digitally — not just stored as images or PDFs.
If you:
- Photograph a repair invoice
- Save it to cloud storage
- Keep totals separately in a paper notebook
you are not compliant.
The digital record must include:
- Date
- Amount
- Category
- Property (if relevant)
Simply archiving documents does not satisfy the structured data requirement.
That said, attaching digital copies of receipts to transactions within accounting software is best practice. It creates a clean audit trail and protects you in the event of an HMRC enquiry.
Modern accounting platforms allow landlords to:
- Upload or forward receipts
- Attach them directly to transactions
- Store everything securely in one place
The important point is that scanned documents complement digital records — they do not replace them.
Myth 3: “PDF statements from my letting agent are enough”
Another common misunderstanding relates to letting agents.
Many landlords receive:
- Monthly PDF statements
- Annual income summaries
- Expense breakdowns
These are helpful summaries — but they are not digital records in HMRC’s sense.
A PDF is essentially a static document. The data inside it cannot be automatically extracted and submitted to HMRC without being entered into compliant software.
If you rely solely on PDF statements and then:
- Manually total them at quarter-end
- Type the figures into software
you risk breaking the required digital journey.
To comply with MTD, you must record the underlying income and expense data in digital form — ideally as transactions flow through your bank account.
Platforms built for landlords integrate directly with bank feeds and allow agent statements to be reconciled against real transactions. That ensures:
- Rental income is correctly recorded
- Fees are categorised properly
- Nothing is missed
- Your quarterly submissions are accurate
PDFs are useful reference documents. But they are not a substitute for structured digital accounting records.
How often must records be kept up to date?
Another area of confusion is timing.
Do you need to update records daily? Weekly? Quarterly?
HMRC does not require real-time bookkeeping. But under MTD, landlords must:
- Maintain digital records continuously, and
- Submit quarterly updates based on those records.
That means your records must be sufficiently up to date to produce accurate quarterly figures.
Quarterly reporting changes the rhythm
Under the previous Self Assessment system, many landlords updated records once a year.
MTD changes that.
You’ll need to submit summary figures to HMRC every quarter. If your records are incomplete, inaccurate or delayed, your submissions will reflect that.
In practical terms, landlords should aim to:
- Reconcile bank transactions regularly (monthly is sensible).
- Categorise income and expenses as they arise.
- Ensure property allocations are accurate.
- Review figures before each quarterly submission deadline.
Leaving everything until the end of the quarter creates unnecessary pressure — and increases the risk of mistakes.
The benefit of ongoing record-keeping
There’s a hidden upside to this shift.
When records are kept up to date:
- You always know your true rental profit.
- You can see cash flow clearly.
- Tax liabilities become predictable.
- Mortgage decisions are easier to assess.
- Portfolio performance becomes measurable.
Digital record-keeping isn’t just about compliance. It’s about clarity.
Landlords who use property-focused accounting platforms often find that quarterly reporting becomes almost automatic — because transactions are categorised in real time and reports are generated instantly.
What HMRC does not require
It’s also worth clearing up what HMRC isn’t asking you to do.
You do not need to:
- Submit every individual transaction to HMRC each quarter (only summary totals are required).
- Store physical receipts if you keep compliant digital copies.
- Change accountants (although you should ensure they are MTD-ready).
- Learn complex accounting rules — software handles categorisation logic.
The emphasis is on maintaining accurate digital records and ensuring submissions are made through compatible software, followed by a final declaration at the end of the tax year.
That’s it.
Choosing the right approach as a landlord
When deciding how to comply with MTD’s digital record-keeping requirements, three main options are available to landlords:
- Property-specific accounting platforms
- Spreadsheets + bridging software
- Generic accounting software
While spreadsheets may technically satisfy the rules, they rarely scale well for growing portfolios.
Generic accounting systems can work — but they’re not designed around rental income, mortgage interest restrictions or property-level reporting.
A dedicated landlord accounting platform brings everything together:
- Bank feeds
- Automated rental tracking
- Property-level profit and loss
- Expense categorisation aligned to HMRC requirements
- Quarterly MTD submissions
- Year-end reporting and final declaration support
Instead of retrofitting your property finances into business software, you use a system built around how landlords actually operate.
For readers already engaged with MTD preparation, the priority is ensuring your digital records are compliant, efficient and future-proof.
The bottom line
HMRC’s digital record-keeping rules are not as mysterious as they first appear.
To summarise:
- A “digital record” means structured transaction data stored electronically.
- Spreadsheets are allowed — but must link digitally to compatible software.
- Scanned receipts and PDFs alone are not sufficient.
- Records must be kept up to date enough to support quarterly submissions.
- The digital journey must remain intact from transaction to submission.
For landlords, the transition to digital is not just about avoiding penalties. It’s about upgrading how you manage your rental income and expenses.
Accurate, real-time records provide visibility, control and confidence — particularly in a market where tax rules and costs are constantly evolving.
Ready to simplify digital record-keeping?
MTD is changing the way landlords report income — but it doesn’t have to make your life harder.
Hammock is a modern accounting platform built specifically for UK landlords. It connects directly to your bank accounts, automatically tracks rental income and expenses, categorises transactions correctly and prepares MTD-ready submissions — all in one place.
Instead of juggling spreadsheets, PDFs and manual reconciliations, you can manage your entire property portfolio with clarity and confidence.
Digital record-keeping doesn’t have to feel like a compliance burden. With the right platform, it becomes a competitive advantage.
Try Hammock and get MTD-ready today.