Honourable and personal residential letting experts

17Jan

Making Tax Digital

What is ‘Making Tax Digital’?

Making Tax Digital (MTD) is a government initiative designed to modernise the tax system by requiring businesses and landlords to keep digital records and submit tax returns using compatible software. For landlords in the UK, this means saying goodbye to traditional paper-based record-keeping and hello to a more efficient, accurate, and streamlined digital process.

However, its implementation has been spoken about since 2015, therefore although 2026 is being suggested as the next start date, personally I would not hold your breath.

But bear in mind that the landscape of financial management has undergone a significant transformation, with governments worldwide moving towards digitalisation. So it will happen…we just don’t know exactly when!

How will it affect me?

If you earn less than £30,000 income pa  you will not need to be part of the scheme ( yet )

Landlords with an income over £50,000 will still have to join MTD from April 2026, followed by those earning over £30,000, from April 2027.

A statement on the HMRC website says it will ‘keep under review the decision on further mandation of businesses and landlords with income below £30,000’.

But it has had a checkered history. A year ago landlords and others were given an extension to the deadline for using the software. Now landlords earning under £30,000 a year are completely exempt.

What are the benefits of Making Tax Digital for landlords?

Accuracy and efficiency:

  • Digital record-keeping minimises the risk of errors associated with manual data entry.
  • Automation of calculations reduces the time spent on paperwork, allowing landlords to focus on other aspects of property management.

Real-time financial insight:

  • Digital platforms provide real-time access to financial information, enabling landlords to make informed decisions promptly.
  • Access to up-to-date financial data facilitates better budgeting and financial planning.

Reduced administrative burden:

  • MTD streamlines the tax submission process, reducing the administrative burden on landlords.
  • Automatic updates and reminders help landlords stay on top of their tax obligations, avoiding penalties.

 

What steps have we taken to help you? 

As you know we recently upgraded our CRM software in order to be ready once MTD comes into play. This means that you will not have to research a MTD compatible accounting software as we understand from our providers it will work once we know exactly what needs to be done.

Since all of the payments and rental income is already digitised the information is already to go. 

Part of the set up will be to understand the deadlines – at the moment we understand this to be quarterly. . 

 

If you have any questions on this or any subject lettings-related just give me a call on 01480 494939.