Record rent with agent fees deducted

How to record rent when a letting agent deducts fees before they pay you in Sage Sole Trader.

For Making Tax Digital (MTD) for Income Tax, record your rental income before any deducted fees, then record the fees as expenses separately.

This helps in making your Making Tax Digital (MTD) for Income Tax figures show the right income and expenses.

This applies to:

• Lettings agent fees
• Maintenance fees
• Service charges

1. Categorise the bank receipt you received as Period amount income.
2. Use the amount you actually received in your bank, not the full rent due.
3. Add a journal to gross up the deducted fee, so your income and expenses are accurate.
4. In the journal, debit Legal, management and other professional fees for the deducted amount.
5. In the same journal, credit Period amount income for the same amount to total your income up to the full rental amount.
6. Save the journal. Sage then shows the full rent as income, and the deducted amount as an expense.

Record monthly maintenance fees as a normal expense if you pay them separately. Use the same gross-up approach if the rental amount deducts those costs before you receive it.