Making Tax Digital Update

Up until December 2022 the Government had intended for all landlords with an income over £10,000 to be obliged to submit their income tax returns from April 2024 digitally using approved software.

In late December 2022 the Government announced that Making Tax Digital (MTD) would be delayed by a further 2 years to April 2026 and that it will only be for landlords with an income of more than £50,000.

Those with an income from property of between £30,000 and up to £50,000 will be obliged to use MTD from April 2027.

As it now stands, from April 2026 landlords with an income from property of more than £50,000 will be required to keep digital records and provide quarterly returns plus one annual return on their income and expenditure to HMRC through MTD-compatible software.

According to HMRC the postponement of the mandatory use of software should help smaller businesses (including landlords) in the long run and MTD remains “a critical part” of the Revenue’s plan to modernise the UK tax system.

For those landlords who submit their own tax returns at present and do not use an accountant consideration should be given to doing so when it is considered that 4 quarterly and 1 annual returns are being required and as always a late submission will result in a fine.

However, there may well opportunities for landlords with the introduction of MTD and again an accountant will be able to advise.