Guides · Published 21 July 2026 · Updated 3 August 2026
What goes in each MTD category
Categorising is where the time goes in a quarterly update, and it’s where every real question turns up. HMRC doesn’t want a list of your transactions: it wants totals in a fixed set of boxes. This is what each box is for.
Which set you see depends on your business. A UK property business uses the SA105 categories; a sole trade uses SA103. If you have both, they’re two separate businesses with separate figures, filed separately.
What goes in each property category (SA105)
| Category | What goes in | What doesn’t |
|---|---|---|
| Rent from tenants | Rent your tenants pay you, including rent paid in advance and rent paid on a tenant’s behalf | A deposit you’re holding but haven’t become entitled to |
| Other property income | Insurance payouts, fees you charge tenants, income from a parking space, garage or storage | Money from selling the property, which is capital, not rental income |
| Rates, insurance and ground rents | Council tax and water rates you pay, buildings and contents insurance, ground rent, service charges | Utility bills a tenant pays directly to the supplier |
| Repairs and maintenance | Like-for-like repairs, repainting, servicing the boiler, fixing a roof | Extensions, loft conversions and upgrades: see “repairs and improvements” below |
| Loan interest and financial costs | Mortgage and loan interest, arrangement fees, bank charges on the letting account | The capital repayment part of a mortgage payment: only the interest belongs here |
| Legal, management and professional fees | Letting agent commission, tenancy agreements and renewals, accountancy, ground-rent collection | Legal fees for buying or selling the property, which are capital |
| Services you provide (including wages) | Cleaning, gardening, communal lighting, wages for a caretaker or handyman | Money you take out for yourself, which is Personal |
| Property travel costs | Mileage or fares for trips to inspect, repair, let or manage the property | The personal leg of a journey you combined with a property visit |
| Other allowable property expenses | Advertising for tenants, phone calls, stationery, landlord association subscriptions | Anything already recorded in another box, which would count it twice |
The loan interest box works differently if you let residential property: since April 2020 that interest has not been deducted from your rental profit the way other expenses are. You still record it, and HMRC turns it into a basic-rate tax reduction when the year is worked out (HMRC’s guidance sets out how, with worked examples (opens in a new tab)). Commercial lettings sit outside that rule. If you are not sure which rules your property falls under, ask your accountant or HMRC.
What goes in each self-employment category (SA103)
| Category | What goes in | What doesn’t |
|---|---|---|
| Sales and work done | The full price a customer paid for goods or work, before platform fees, commission or card charges come off | Money that isn’t for goods or work: a loan, a refund, or your own money paid in |
| Other business income | Grants, interest on a business account, insurance payouts, hiring out your equipment | Rent from a property you let, which is a separate property business |
| Goods and materials | Stock bought to sell on, raw materials, parts and consumables used on a job, packaging | Tools and equipment you keep and use for years: where those go depends on your accounting basis, so check with your accountant |
| Payments to subcontractors | Construction industry payments to subcontractors under CIS | Any other freelancer or supplier: put them in the box matching what they did |
| Staff wages and costs | Wages, employer National Insurance, pension contributions, recruitment and staff training | Money you take out for yourself, which is Personal |
| Van, car and travel | Fuel or mileage claims, vehicle insurance, tax and repairs, fares, parking, accommodation on business trips | Ordinary commuting, parking fines, and the personal share of a vehicle used for both |
| Premises: rent, rates, power | Rent, business rates, electricity, gas, water, premises insurance and security | The whole of your home’s bills if you work from home: only the business share belongs here |
| Repairs and maintenance | Repairing or servicing premises, tools, machinery and equipment | Replacing something with a markedly better version: see “repairs and improvements” below |
| Office and admin | Phone and broadband, postage, stationery, printing, software subscriptions | Costs that are really advertising or professional fees, which have their own boxes |
| Advertising and marketing | Adverts, marketplace listing fees, your website and domain, flyers, sponsorship | Entertaining customers, which HMRC treats separately: ask your accountant |
| Bank and loan interest | Interest on business loans, overdrafts and credit cards, plus arrangement and finance charges | The capital repayment part of a loan |
| Accountancy, legal and professional | Accountancy and bookkeeping fees, legal advice, professional indemnity insurance, consultancy | Fines and penalties, including HMRC’s own |
| Other allowable expenses | Trade subscriptions, business insurance, protective clothing, and genuine odds and ends | Anything you’ve already put in another box |
Is it a repair or an improvement?
The rule is the same for a rental and for a trade. A repair puts something back to the condition it was in. An improvement makes it better than it was, or turns it into something different. Replacing a rotten window with a new window of the same kind is a repair. Knocking the wall about to make the window bigger is an improvement.
The awkward middle is a like-for-like replacement in modern materials, because the old kind isn’t sold any more. That usually still counts as a repair, since you’ve replaced what was there with today’s nearest equivalent. A “while we’re at it” whole-room upgrade rarely does. Where one job is part repair and part improvement, it gets split: put a split in front of your accountant.
Why it matters: improvements are capital, so they’re dealt with at the year end rather than in the repairs box. A mistake in a quarterly update is cheap to fix, because updates are cumulative and a correction carries forward by itself. The year end is where it would have to be unpicked.
Personal is not a dustbin
Most people run at least some business money through an account that also does personal things. The Personal category exists for those lines: it keeps them in your records, so your statement still reconciles, and never sends them to HMRC. Money you draw out for yourself belongs there too: a sole trader doesn’t pay themselves a wage. Personal is not for a transaction you are unsure about: ask your accountant or HMRC about those.
Can QuarterFile tell you whether a cost is allowable?
Everything above is a definition: which of HMRC’s boxes a thing belongs in. What we can’t tell you is whether one of your costs is allowable, because that turns on facts only you and your accountant have: how the thing is used, what share of it is business, what your particular arrangement is. If you are not sure about a transaction, ask your accountant or HMRC.
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This guide is general information, not tax advice. For your own position, check with your accountant or HMRC.