If you report rental income under Making Tax Digital for Income Tax, HMRC expects your figures grouped into its own income and expense categories. This guide explains how to map each income and expense category in your Nexus account to an HMRC tax category on desktop.
What you need to know
Category mapping applies to UK landlords using Making Tax Digital for Income Tax.
Mapping is set at account level, so it applies across every property in your Nexus account.
Nexus suggests an HMRC category for each of your categories, so this is a review task rather than starting from nothing.
Your categories load once your letting agent data has synced, so a new account may have nothing to map yet.
Finish your mapping before you submit a quarterly update.
Open the mapping screen
Step 1: Select "Making Tax Digital" from the left menu.
Nexus will display the "Set up Making Tax Digital" page with your remaining set-up steps.
Step 2: Select "Start mapping" on the "Complete category mapping" card.
Nexus will display the "Tax category mapping" screen with two tables, "Income categories" and "Expense categories".
The mapping screen stays available after your set-up is complete, so you can return to it whenever a category needs checking.
Review your suggested mapping
Nexus will show a banner telling you how many categories need reviewing, with a suggested HMRC category already selected against each one. The suggestion is a starting point, not a decision, so check each row before you save.
Step 1: Check each row in "Income categories" against the HMRC category shown in the "HMRC categories" column.
Step 2: Check each row in "Expense categories" the same way.
Step 3: Select the dropdown next to any category whose suggestion is wrong, then choose the right HMRC category.
Step 4: Select "Save".
Step 5: Select "Confirm & Save" in the "Confirm mapping" dialog.
ℹ️ Saving confirms you have checked the matches yourself. You stay responsible for the figures you submit to HMRC, so review a suggestion rather than accepting it unread.
HMRC categories you can choose
Income categories map to one of the following:
Period Amount
Premiums of Lease Grant
Reverse Premiums
Tax Deducted
Other Income
Expense categories map to one of the following:
Cost of Services
Financial Costs
Premises Running Costs
Professional Fees
Repairs and Maintenance
Residential Financial Cost
Residential Financial Costs Carried Forward
Travel Costs
Other
If you are unsure which HMRC category an expense belongs in, check with your accountant before you submit.
Categories that appear later
Your letting agent data syncs to Nexus once a day, and a new income or expense category can arrive with it. Nexus will flag any new category on the "Tax category mapping" screen with a suggested HMRC category and count it in the banner at the top of the page. Check the suggestion and save before your next quarterly update, so those transactions are included.
If there is nothing to map
If the screen shows "No categories to map", your letting agent data has not reached Nexus yet. Your categories will load here once it has, so check again after the next daily sync.
Related
Find out what to check before you submit your quarterly update.
Find out how to manage your quarterly submissions.
Find out how to troubleshoot Making Tax Digital in Nexus.
If you need help mapping your categories to HMRC tax categories in Nexus, reach out via the in-app chat or at support@landlordstudio.com.