Landlords could face monthly HMRC tax bills
3 weeks ago | 27 comments
216,000 landlords and traders haven’t signed up for Making Tax Digital
12:01 AM, 16th July 2026, 3 weeks ago
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More than 200,000 landlords and sole traders have yet to sign up for Making Tax Digital (MTD), with the first quarterly deadline now less than a month away.
Research commissioned by business management platform Tide found that 25% of landlords and sole traders earning more than £50,000 had not registered with HMRC for the new system.
Around 864,000 people are expected to qualify during the first year, which would leave an estimated 216,000 still needing to register and submit their first quarterly update.
Making Tax Digital deadline
The firm’s chief executive, George Schmidt, said: “No one wants to be thinking about tax over summer, but we can’t escape the fact that Making Tax Digital is here, and the first deadline is just days away.
“The first wave of business owners need to ensure they are signed up with HMRC and file on time, to avoid penalties that accumulate with each missed deadline.”
He added: “It is a worry that so many still aren’t ready for the switch.”
MTD takes five filings
Most respondents in the survey of 500 landlords and sole traders, were also unclear about how frequently they would have to report their income.
Making Tax Digital requires four quarterly updates followed by a final annual submission, taking the total to five filings each year.
However, 85% did not know they would need to file five times, while 31% believed they would have to make at least eight submissions.
Awareness has changed little since Tide carried out similar research in February, when 83% of sole traders did not realise that five submissions would be required each year.
Distraction for landlords
The additional administration is also expected to take time away from running businesses and managing properties.
Some 44% said they expected to complete MTD work during their usual working hours, while 32% believed they would have to deal with it during their time off.
Respondents estimated that the new tax requirements would take up the equivalent of six full working days during the next 12 months.
Tide calculated that the time spent on the work could result in £1.5 billion of lost business revenue during the first year.
Tags:
HMRC quarterly updates, landlord tax returns, Making tax digital, MTD deadline, MTD for landlords, sole trader tax
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Member Since June 2015 - Comments: 350
10:51 AM, 16th July 2026, About 3 weeks ago
It’s not for lack of trying in some cases.
It took me numerous attempts to link my software to HMRC including 2 phone calls to HMRC and several messages to the software support team. I still can’t get my husband’s to link and have just been told by the support team HMRC will need to sort it out. It’s especially frustrating when there’s yet another person involved. I’m the record keeper for both of us and my son. My accountant wants me to do the submissions for myself and my husband whereas my son’s accountant wants me to provide my son’s figures to him and they will deal with it.
There doesn’t seem to be any consistency whatsoever.
Member Since January 2024 - Comments: 394
11:30 AM, 16th July 2026, About 3 weeks ago
The expected figures are probably incorrect.
Since 5/4/25 I’ve set many of my clients up in partnership or as companies, both outside the scope of MTD. I expect many decent advisors have done the same
Member Since July 2026 - Comments: 5
8:51 AM, 30th July 2026, About 6 days ago
Jo’s experience is the part the statistics miss. The 216,000 figure gets reported as apathy, but the software-to-HMRC authorisation step is where people are genuinely stuck – the sign-up has to be done first, then the software authorised separately in your HMRC account, and if either half is incomplete the submission simply won’t go through. Worth allowing days rather than hours for that part, not the filing itself.
Ryan’s point is worth underlining too: MTD for Income Tax applies to individuals with property or self-employment income, so partnerships and limited companies sit outside it for now. Anyone who restructured ahead of April should still check whether they have any remaining personally-held property income above the threshold.
The other thing catching people out is the threshold itself – it’s gross rent before expenses rather than profit, and each joint owner counts only their share. I got tangled enough in the mechanics that I built a free 2-minute checker which works out whether MTD applies to you and from when: landlordcompass.co.uk – no signup needed.