What Is a Chart of Accounts?
A chart of accounts is simply a list of categories for organising financial transactions. Think of it like the labels on a filing cabinet — each drawer holds a different type of paperwork.
HMRC has an approved list of income and expense categories for rental property businesses. When you submit your MTD quarterly updates, your income and expenses need to be sorted into these specific categories.
RentalBux has built HMRC's approved chart of accounts directly into the platform. When you log a transaction, the system tries to match it to the correct HMRC category automatically.
How Auto-Categorisation Works
When a transaction enters RentalBux — whether from an uploaded bank statement, a manually entered expense, or a scanned receipt — the system looks at the details and assigns a category.
It considers:
The vendor/supplier name
The transaction description
The transaction details
For rental income, the system recognises incoming payments that match your invoices and automatically categorises them as Rental Income.
When to Override a Category
Auto-categorisation is right most of the time, but not always. You should review the suggested category and change it if needed.
Common situations where you might override:
A payment to a person whose name doesn't suggest what it's for
For example, a bank transfer to "John Smith" could be a repair payment, a legal fee, or an agent commission — you'll need to tell RentalBux which one.
A transaction that's been miscategorised
Maybe the system classified an electrical safety inspection as "Repairs" when it should be "Legal & Professional Fees." Just click on the category and change it.
A personal transaction that appeared in your bank feed
If you use the same bank account for personal and rental expenses, you'll need to flag personal items so they're excluded from your rental accounts.
Why Correct Categorisation Matters for MTD
When you submit your quarterly MTD update, HMRC receives a summary of your income and expenses broken down by category. If expenses are in the wrong category, your submission may not reflect reality — which could lead to queries, corrections, or (in extreme cases) penalties.
Getting categories right also matters for your own understanding of where your money is going. If all your expenses are lumped under "Miscellaneous," you lose visibility of what's actually costing you the most.
Reviewing Before You Submit
Before each quarterly MTD submission, take five minutes to review your categorised transactions.
Go to the MTD Module.
Click on the quarter you're about to submit.
Review the breakdown of income by category and expenses by category.
If anything looks wrong, click through to the individual transactions and adjust.
This quick review is your safety net. It takes a few minutes and gives you confidence that what's going to HMRC is accurate.
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