Letting furnished property: records to keep

Furnished property records should distinguish rent, furniture and replacement expenditure, private use and the actual letting arrangement. The special furnished holiday lettings tax regime was abolished from April 2025, so older checklists must be reviewed before use.

For personal tax, the abolition applies from 6 April 2025; company timing differs. Keep transitional questions and any earlier qualifying periods visible for professional review.

Identify the letting arrangement and relevant period

Record whether the property is let for short stays, longer residential occupation or a mixture, and whether the owner uses it personally. Keep the booking calendar and tenancy or guest agreements with the income records. The commercial description furnished holiday accommodation does not preserve an abolished tax regime. The tax period and actual arrangement must be assessed under the rules applying to that period.

The special furnished holiday lettings regime ended from 6 April 2025 for Income Tax and Capital Gains Tax, and from 1 April 2025 for Corporation Tax. Former qualifying properties now need to be considered within the relevant ordinary property business framework, with transitional matters reviewed separately. ^[1] Make this change visible in the working papers rather than allowing old software labels to dictate the calculation.

Reconcile booking income to actual receipts

Create a booking schedule showing gross charges, platform or agent fees, refunds and amounts paid to the owner. Explain deposits, cancellations and payments crossing reporting periods so the preparer can apply the appropriate accounting basis. A platform's net payout is not a complete description of the letting activity. Keep the platform statement and bank receipt connected, with any difference explained by identifiable charges or adjustments.

For properties using several booking channels, check that the same reservation has not been imported twice through a channel manager and an individual platform export. Record direct bookings separately and reconcile the annual calendar with the income schedule. Where the owner or family occupied the property, identify the dates clearly so private-use questions are not hidden among periods that simply show no rental receipt.

Maintain an inventory for furnishing expenditure

Keep an inventory of furniture, appliances and other domestic items supplied to occupants. For each purchase, identify whether it is an initial item, a replacement or an addition, and retain the invoice. When replacing an item, record what happened to the old one and whether the new item differs materially. This evidence supports a review of replacement relief rather than assuming every furnishing purchase is immediately deductible.

HMRC's property income guidance distinguishes replacement domestic items from initial furnishing and sets conditions for relief, including how an improvement affects the allowable amount. ^[2] Use separate bookkeeping categories for building repairs, domestic replacements and new capital items. A single furniture and maintenance total can make those distinctions difficult to recover later, especially when receipts describe products without identifying which property received them.

Preserve information from the former regime

Where the property previously qualified as a furnished holiday letting, retain earlier computations, capital allowance pool records and carried-forward loss information. Abolition does not mean every historic balance should be deleted or transferred without review. The transition includes specific treatment for existing pools and losses, while new expenditure after the change needs consideration under the current property rules. ^[1]

Prepare a bridge from the last calculation under the former regime to the first calculation under the new treatment. Show each opening balance, the supporting prior-year document and the review decision. Mark unresolved questions about earlier disposals or relief conditions for specialist advice. This is particularly useful when changing accountants, because a new preparer may otherwise receive a current bookkeeping export without the historic schedules explaining the balances.

Review the broader property records annually

Keep loan interest and repayments separate, identify jointly owned interests and record any change of use or ownership during the year. The end of the former tax regime should prompt a review of the relevant tax assumptions, but it does not answer separate questions about licensing, planning, business rates or VAT. List those issues for appropriate advice rather than treating one tax change as a complete regulatory assessment.

See Property expenses: repairs or improvements when classifying building works, and Landlord tax return support for support preparing the personal property tax records. In an initial enquiry, state whether the property previously used the furnished holiday lettings regime, the relevant years and whether transitional schedules are available. That information helps establish the work required before an annual return is prepared from potentially outdated categories.

Finish the file with an annual reconciliation of bookings, gross receipts, fees, refunds and bank settlements, plus the furniture inventory and private-use calendar. Retain explanations for missing statements and disputed charges. A later platform correction can then be traced to a specific reservation or expense without reopening the entire year's records or guessing which property and reporting period it belongs to.

Illustrative scenario

A landlord previously treated a holiday cottage under the special regime. They retain historical records but update the current-year treatment and ask how replacement furniture and earlier balances should be handled.

Preparation checklist

• Identify the letting arrangement
• Separate furniture costs
• Review post-abolition treatment
• Retain historical evidence