When a letting agent collects your rent: MTD records and who sends the update

acrenvo.com/guides/mtd-letting-agent-collects-rent, last reviewed 25 October 2026

Grace is fictional, but her arrangement is a familiar one. She lets a two-bedroom flat through a high-street agent on a fully managed service. The tenant pays the agent and the agent arranges any repairs, so once a month Grace receives one payment and a statement showing how it was worked out. As she got ready for Making Tax Digital (MTD) for Income Tax, she was not sure which figure on the statement belonged in her records. She also wondered whether the agent could simply send her quarterly updates as part of the service. This guide walks through what GOV.UK says about both questions, and where it says nothing.

Grace is far from alone. GOV.UK’s English Private Landlord Survey 2024, published on 5 December 2024, reported that just over two in five (43%) landlords in 2024 said they used agent letting services while just under one in five (18%) said they used agent management services. The survey asked only landlords who protect deposits themselves through a Tenancy Deposit Protection (TDP) scheme. It adds a caution of its own about that: these figures relate only to landlords who registered a deposit directly with the TDP and as such may underrepresent the use of agents.

What GOV.UK asks you to record from an agent’s statement

The payment that reaches your bank account is the rent after the agent has taken their fee and paid any bills, so it is a net figure. GOV.UK does not write about letting agents by name, but it does cover this situation in general terms. If you only know what your income is after expenses are deducted (also known as net income) you need to:

• ask what the full amount of income was before expenses were deducted
• create a digital record for the full amount of income
• create a digital record for your expenses

If your statement shows the full rent the agent collected before anything was taken off, as Grace’s does, the first step is already done. The other two steps mean the rent and each cost are recorded separately, rather than as one figure for what was left. You must create digital records for UK property income that you receive and expenses that you incur, such as your rent and the costs of repairs.

Each of those records needs the same few details as any other. When you create records of your income or expenses, you will need to record the:

• amount
• date when the income was received or expenses incurred
• category (the type of category you use depends on the type of business you have)

A worked example with Grace’s statement

How the agent’s fees are treated

The agent’s fee is a cost of letting the property, and GOV.UK treats it that way. You can deduct expenses from your rental income when you work out your taxable rental profit as long as they are wholly and exclusively for the purposes of renting out the property. Its list of allowable expenses includes letting agent fees and management fees, alongside general maintenance and repairs to the property. Making Tax Digital for Income Tax uses the same categories of income and expenses as Self Assessment. So the way you categorised agent fees for Self Assessment carries over to your MTD records.

A repair the agent arranges and pays for on your behalf is still your expense, and it is recorded in the same way as a repair you paid for yourself. GOV.UK draws a line between a repair and an improvement, though, and that line does not move because an agent arranged the work. Allowable expenses include the costs of maintenance and repairs to the property (but not ‘capital’ improvements). If the agent arranges work that would add something to the property that was not there before, GOV.UK treats it as a capital expense instead. Capital expenses are not allowable and cannot be claimed against your rental income but you should keep records of them as you might be able to set them against Capital Gains Tax if you sell the property in the future. The guide to MTD digital records explains how GOV.UK expects other awkward expenses to be recorded.

Why the threshold counts the rent before the fee

Whether you need to use MTD at all is a separate question from what goes into your records, and here the net payment can mislead. GOV.UK defines the figure it tests like this: Qualifying income is your total income from self-employment and property, before expenses (also known as turnover), based on the tax return you submitted in the previous tax year. Because the agent’s fee is an expense, the test looks at the rent the agent collected, not the smaller amount that reached you. A landlord who only ever looks at the monthly payment can therefore underestimate how close they are to the threshold.

There is one exception, and it applies only to property you own with someone else. If you jointly own a property and only receive notice of your share of the income after expenses have been deducted, HMRC assesses that figure as your qualifying income. The guide for joint property owners explains how that works. Grace owns her flat outright, so the exception does not apply to her, and the MTD threshold calculator needs the full rent the agent collected.

Why a letting agent does not send your updates unless you authorise them

A letting agent acts for you with your tenant, but that does not make them your agent with HMRC. To act for you on MTD, someone needs their own account with HMRC and your permission. Your agent needs an agent services account, which is different from the HMRC online services for agents account they may already use. Your agent needs your permission to sign you up, and an agent who is not authorised by you cannot sign you up for MTD for Income Tax. GOV.UK explains how you give that permission in its guidance on authorising an agent, and our guide to authorising an agent for MTD walks through the steps from your side.

If your letting agent does offer to handle MTD, it helps to know which role they would take, because the two roles can do different things. You can have only one main agent at a time, but any number of supporting agents, and more than one agent is possible for MTD for Income Tax only. For other tax services, such as Self Assessment, you can only use one agent. A supporting agent can send quarterly updates but cannot finalise your overall tax position, submit your tax return or view your tax calculation. If an accountant also works on your tax, the two of them need to work together, because if more than one agent works on the same business, one combined update must be sent to HMRC for each update period, and one tax return submitted after any adjustments.

Whoever sends the updates, the responsibility stays where it was. You are responsible for your own tax affairs, even if you authorise someone to act on your behalf. For Grace, that means checking that the figures in each update match her statements, even if someone else presses send.

What GOV.UK does not say

GOV.UK’s MTD guidance never uses the words “letting agent”, so a few practical questions are left open. It does not say whether you should use the date the tenant paid the agent or the date the agent paid you, when the two fall in different update periods. Nor does it say how often you should turn a statement into records. Rather than guess, we would suggest asking an accountant or tax adviser to help you settle both points for your own letting. The guide to simpler MTD record keeping covers the other situations where GOV.UK allows lighter records.

Questions landlords with a letting agent often ask