Guide · Letting agents

Your agent paid you £850. Your rent was £1,000.

When a letting agent deducts fees and costs before paying you, your bank statement shows the net figure. Your records need the gross. Here's how to gross it up, and why it matters.

5 minute readLast reviewed 8 October 2026General guidance, not tax advice

The problem

One bank line, three different things

Your bank only sees the money that arrived. Your agent's statement shows what actually happened.

Your bank statement

ABC LETTINGS · 14 ELM RD£850.00

One payment in. No rent, no fees, no repair.

Your agent's statement

Rent collected£1,000.00

Management fee−£120.00

Tap repair−£30.00

Paid to you£850.00

Why it matters

Same profit, wrong figures

Recording £850 as rent gives the right profit for that month. But it gets three other things wrong.

Your income is understated. HMRC defines rental income as the rent your tenants pay, and Making Tax Digital asks for income and expenses separately. Net figures understate both.

Your qualifying income looks lower than it is. Whether you need Making Tax Digital depends on gross income, before expenses. Rent of £33,000 received as £29,040 net is still over the £30,000 threshold. Check yours.

Your expenses go missing. Agent fees and repairs are allowable expenses in their own HMRC categories. Hidden inside a net figure, they never show up as costs, so your records don't match the agent's statement or your accountant's figures.

How to do it in RentalForce Live

Split the payment, part by part

1
Import your statement
The agent's payment arrives as one bank line of £850.
2
Open it and choose Split
Have the agent's statement in front of you.
3
Add a part for each line
Rent as a positive amount; each deduction as a negative one. Give each part its property, category and date.
4
Balance to £0.00
The parts must add back to the bank line, to the penny, before you can save.
5
Check it's reviewed
Every part needs a category and a property. Only reviewed transactions count in your figures.
6
Add a note
Optional, but useful: the agent statement reference, so you can find it again.

The split, as you'd enter itSample data

Bank line · ABC Lettings · 14 Elm Road		£850.00
Rent for October	Rent income	£1,000.00
Management fee (12% incl. VAT)	Professional fees	−£120.00
Tap repair	Repairs and maintenance	−£30.00
Left to allocate		£0.00 ✓

The original is never lost. The bank line is kept exactly as your bank reported it. The parts sit underneath it.

Nothing counted twice. Once split, only the parts count. The £850 itself drops out.

Change your mind? Edit the parts, or undo the split and start again.

Where each deduction goes

Common agent deductions

On the agent's statement	HMRC category
Rent collected	Rent income
Management, letting or tenant-find fees	Professional fees
Repairs and maintenance arranged by the agent	Repairs and maintenance
Insurance, ground rent, service charges, or council tax during a void	Premises running costs
Improvements, such as a new kitchen or an extension	Capital, not deducted

In RentalForce you pick from your own categories, each linked to an HMRC category, so you don't need to learn HMRC's terms. Capital items are recorded but never sent in a quarterly update. If you're not sure whether something is a repair or an improvement, ask your accountant.

Good habits

Making it routine

Split it the day it lands

The agent's statement usually arrives with the payment. Five minutes now saves an evening at quarter end.

One payment, several properties?

Give each part its own property. A payment can be split into up to five parts, so combine items with the same property and category where you need to.

Same agent, same pattern

Most months look alike. Once you've split the first payment, the next ones take a minute.

Keep the statements

The agent's statement is your evidence for the split. Keep it with your records.

RentalForce

Every pound accounted for, and back to the penny.

Gross rent in, fees out, and the bank line still where you left it.

Become a founding landlord Do I need Making Tax Digital?

Sources

This guide is general information, not tax advice. For advice on your own position, speak to an accountant or tax adviser. RentalForce is not currently HMRC recognised software. Direct submission to HMRC is planned for 2027.