08/04/2024

Making Tax Digital: A Timeline for London Landlords on the Upcoming Changes

+44(0) 20 7820 4774

Did you know that HMRC plans to introduce new rules on how landlords file their tax returns?

Here’s an update on what these changes involve and a timeline for when they’ll come into force.

Making Tax Digital (MTD) is an initiative designed to streamline the tax system by fully digitising it.

As MTD has been mooted for quite some time and its implementation delayed twice already, you may have already heard about it.

But if you’re hazy on the details or have buried your head in the sand about it because tax talk bores you silly, here’s a reminder.

MTD will require landlords and the self-employed to:

  • Keep digital records of all income and expenditure.
  • Send HMRC quarterly updates.
  • Submit an end-of-year final declaration.
  • Use approved third-party software when reporting to HMRC.

HMRC plans to phase in the new system gradually. The current timeline for MTD compliance is:

  • 6 April 2026, if your annual business or property income tops £50,000.
  • 6 April 2027, if your annual business or property income tops £30,000.

There is no news yet about those with incomes below £30,000, but no doubt that will come later.

What happens to landlords who don’t comply?

HMRC has concocted a (somewhat convoluted) points-based penalty system for people who fail to comply. If, for example, you submit incorrect information or don’t use the appropriate software, you’ll accumulate points. When you accrue a certain number of points, you’ll be fined. The more points, the bigger the fine.

Will MTD have a significant impact on landlords?

A well-organised landlord who already maintains digital records may just have to check if their software is MTD compliant and adjust to more regular reporting deadlines.

However, if you’re the kind of person who always has a last-minute panic when your tax return deadline looms, and files receipts down the back of the sofa, you’re in for a big change.

Whichever category you fall into, it’s worth thinking about MTD now. Even though its introduction is still some way off, the deadlines will come around quickly enough.

Also, it can take time to implement a new system, and you may need to purchase new software. As you accumulate points for every error in your reporting, the number of fines you rack up could quickly grow if you’re sloppy.

Many landlords find going digital with their accounts a more efficient way to run their portfolios.

It means all relevant records are in one place and easily accessible, enabling them to monitor cash flow closely.

If you’d like more advice on preparing for MTD, please contact us here at MyLondonHome today.

This post was written by:

Steven Herd

Steven's extensive 30 years of estate agency experience in London culminated in launching MyLondonHome, which has enabled him to bring together a hand-picked team to provide the high level of quality advice, market strength and service he is renowned for.

Share this post

Join The Discussion

Similar Posts

The Biggest Challenge Facing London Landlords Today – And How to Tackle It

One issue, above all else, causes landlords sleepless nights. Can you guess what it is? Could it be maintenance and repairs? Or maybe it’s worrying about the rent being paid on time? If you answered one of the above, thanks for playing, but you’re mistaken. The biggest challenge landlords currently

Walk This May: Why You Should Step Out in London This Month 

There’s an old saying: The simple things in life are often the best. And when it comes to exercise, what could be simpler than putting one foot in front of the other? While there are countless ways to get fit, nothing matches the ease and accessibility of walking. You can

Subscribe to our YouTube channel to get a notification every time we post a video.

Compare listings

Compare