Making tax digital for landlords

Landlord Discussion
1

I was just reading about this and it’s my understanding that from April 2026 it becomes mandatory for landlords with annual property or trading **income exceeding £50,000 are required to submit accounts every 3 months /quarterly.
And From April 6th, 2027 the threshold for mandatory MTD registration will be lowered to include landlords with annual property exceeding £30,00 and from April 6th, 2028 the threshold will be lowered again to include landlords with annual property exceeding £20,000.

So by April 2028 I guess most private landlords will need to move over to this new system

It may be the case that when this scheme is up and running landlords will have to pay rental income tax every quarter ?

Just wondering

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2

What you say is exactly what my accountant told me two weeks ago

3

I guess they want to go from 6 monthly payments on account to quarterly payments, I suppose if you get paid monthly rent then the end game is monthly tax payments! They seem to need every last penny as soon as possible, can’t be too long before the country needs a bailout

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4

Only 2 weeks ago? I’ve been warning clients for years - it was due to start a few years ago, but they’ve kept kicking the can down the road. No more kicking now though!

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5

They have said that there is no plan to change payment timeframes.

Apparently it’s so the Treasury can budget better so they’ve got an idea of what’s going to be coming in.

And it’s so people have to keep better records!

But I can see them trying to collect tax as the year progresses at some point in the future.

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6

he did tell me a couple of years ago but then it was put off . Now on again

7

when I first found about about this many years back I just tweaked the spreadsheets I use for tax and expenses and started making sure I entered everything in as I went along (rather than a big catchup with boxes of unrecorded receipts etc)
Its a good discipline and actually makes your life easier
You can easily extract the data when and if you need it for HMRC and will be ready for MTD. But even more importantly YOU know if there are any arrears or rents are not meeting costs and margins and signa;s when you need to raise them etc

It won’t effect me as I am selling up and leaving “landlording” - but it was nice to know I was ready to respond if it did come in.

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8

I have a property owned jointly with my wife, and our annual rental income works out just over £10,000 each. Would we be affected?

9

Next year April 2026 if income over 50k you file quarterly then in. 2027 30k to 50k file quarterly

10

There’s been an update on jointly owned property Update on making tax digital and jointly owned property | ICAEW

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11

Cath, does the first of these “relaxations” mean that landlords would have to pay tax on the gross rent for the first three quarters and then reconcile when they declare their expenses in the final quarter? If so, then its not a very attractive offer, especially for those with tight cashflow.

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No, MTD reporting has no effect on tax. Your payments on account will still be due as under the existing rules.

13

Ok. Thanks for clarifying that.