Landlords face filing burden under Making Tax Digital
1:01 AM, 12th January 2026, 3 months ago
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Landlords are being encouraged to finalise their self-assessment earlier, ahead of Making Tax Digital, which could leave them having to file as many as 10 tax returns.
A story in The Telegraph warns hundreds of landlords will be required to report quarterly returns to HMRC under Making Tax Digital, with the transition period meaning many could face submitting up to 10 returns between now and the end of next year.
Under the controversial scheme, from April 2026, landlords earning more than £50,000 will be required to keep digital records and submit quarterly updates to HMRC using authorised MTD-compliant software.
Landlords earning between £30,000 and £50,000 will join the scheme in April 2027.
Ignorance is not a defence
The first deadline for quarterly reporting falls on August 7 and relates to income and expenses recorded between April 6 and July 5. Subsequent updates must be submitted every three months, with the following deadline set for November 7.
Despite the move to quarterly reporting, landlords will still be required to complete two further annual tax returns under the existing system. The return for the 2024–25 tax year must be submitted by January 31 this year, while the 2025–26 return will be due January 31, 2027.
Chris Norris, policy director for the National Residential Landlords Association (NRLA), says landlords should start preparing now.
He told The Telegraph: “Ignorance is not a defence, but I think this is going to be confusing for people.
“I can see some people quite innocently doubling up or missing things. Several submissions when you normally do one is very confusing.”
“If you’re not very careful this year, I can see people getting into a bit of a mess, twisting themselves into knots. We’ll certainly be encouraging people to finalise their self-assessment earlier than they would otherwise.”
Customers will gain a better view of the health of their business
HMRC continue to claim Making Tax Digital will be beneficial for landlords but have given little information on how it will work in practice.
An HMRC spokesperson told The Telegraph: “Making Tax Digital customers will need to send us simple quarterly summaries of income and expenditure using compatible software. This can make the annual tax return less burdensome as the information will be pre-populated on their return.
“This means customers will gain a better view of the health of their business and tax liability.
“Quarterly updates are not tax returns, they are simple summaries of your income and expenses from sole trading and property, with no need for adjustments. MTD software will do much of the work.”
As previously reported on Property118, the government admitted in the Making Tax Digital impact assessment that landlords earning £50,000 could incur an average transitional cost of £285 and an average annual additional cost of £115.
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Member Since October 2023 - Comments: 36
11:01 AM, 12th January 2026, About 3 months ago
So if your a married couple and have 50% ownership each of the rental properties that means that under the HMRC 50/50 split of Rental Income rule you will have to use MTD software for two separate Self Assessment returns for each person showing the Rental Income and Expenses on 8 separate submissions through the year, plus the tax year returns for 2024/2025 and 2025/2026 before 31st January for the years 2025 and 2026.
This is so the Big Brother state which includes HMRC can watch your business in more detail and keep a watching eye over you. 1984 springs to mind!
Member Since January 2017 - Comments: 112
11:41 AM, 12th January 2026, About 3 months ago
I know full well how healthy my property business is already. What I do know is under MTD it will be less healthy as my costs will increase.
The accountants I’ve spoken to don’t like it – although many will be thinking of the extra fees they can charge.
Member Since November 2013 - Comments: 65
11:48 AM, 12th January 2026, About 3 months ago
Does anyone actually know what information has to be submitted?
Is it ‘just’ an aggregated summary (every quarter) using the same ‘boxes’ as on the current self-assessment tax return, or is it the ownership-specific proportion of each and every transaction that would have been aggregated into the totals?
Member Since January 2024 - Comments: 351
11:50 AM, 12th January 2026, About 3 months ago
I’m an accountant/tax advisor and prefer my clients to pay me for services that benefit, such as tax planning, rather than services that are a complete waste of time, such as MTD ITSA.
I generally recommend to my clients that they form partnerships, MTD ITSA does not apply to partnerships or limited companies.
Member Since October 2024 - Comments: 197
11:55 AM, 12th January 2026, About 3 months ago
Reply to the comment left by Suicide Jockey at 12/01/2026 – 11:01
And they didn’t not even consider us as a business for S24.
Member Since June 2015 - Comments: 333
12:08 PM, 12th January 2026, About 3 months ago
With the right software the quarterly rental property submissions won’t be too difficult but I certainly wouldn’t have the confidence to do the final end of year submission. That’s what I pay an accountant for.
According to the HMRC website there isn’t any software that deals with my situation – income from property, PAYE, dividends, savings interest and SIPP contributions. Apparently I will need to use 2 different softwares even though all of those activities are about as standard as it gets.
I have no idea where they get the idea the annual cost will be around £115. I’m currently trying out Landlord Vision and Hammock and spending over £1100 a year. At least it’s tax deductable.
There are cheaper options out there but if we have to do this stuff it may as well be with software that actually provides us with useful features in a user friendly format. As soon as the NRLA Portfolio Plus MTD is launched I will have a quick go at that as it is a much, much cheaper option and I already use Portfolio for some stuff (which will hopefully save several hours of the usual set up time). That’s the other bit the government doesn’t seem to have taken into account. Setting up and learning how to use software takes a considerable amount of time. The average landlord is 59 years old and didn’t do computer studies at school. We aren’t accountants. I’ve been trying to engage with this for over 3 years. When I first tried the old version of Landlord Vision it took 6 months and a huge amount of swearing and customer support before I was even vaguely OK with it. The current version of LV is much easier and assumes far less accounting knowledge. Setting up Hammock was relatively quick. Just the time to input all the property, tenant and bank details, watch a few videos, do a one to one Zoom training session, etc. Several hours a day for about a week I guess. How many of us have that amount of spare time?
Member Since January 2024 - Comments: 351
12:15 PM, 12th January 2026, About 3 months ago
Reply to the comment left by Jo Westlake at 12/01/2026 – 12:08
“There isn’t any software that deals with my situation – income from property, PAYE, dividends, savings interest and SIPP contributions” – actually pretty much any accounting software will do this. You just connect the bank feeds for any relevant accounts and categorise the dividends, interest and pension contributions accordingly. For PAYE you just need your P60/P45/P11d.
I use QBO, but you could use Quickfile, Lime Books, Xero, Sage, Freeagent, etc. depending on needs.
Member Since June 2015 - Comments: 333
12:54 PM, 12th January 2026, About 3 months ago
Reply to the comment left by Ryan Stevens at 12/01/2026 – 12:15
I tried Xero (as my accountant loves it) and couldn’t see how to make it work for a multiple owner property portfolio. Some of our properties are owned individually, some with 2 owners, some with 3 and one with 4.
Also most of those systems are set up for general businesses and don’t have headings or categories that make any sense to a landlord with no accounting knowledge.
Member Since February 2015 - Comments: 8
12:56 PM, 12th January 2026, About 3 months ago
Don’t ignore the fact that properly constituted and registered partnerships are not affected by MTD.
…..not yet anyway.
Chris, Somerset
Member Since January 2024 - Comments: 351
1:07 PM, 12th January 2026, About 3 months ago
Reply to the comment left by Jo Westlake at 12/01/2026 – 12:54
I’m not a fan of Xero, but it is all personal preference. QBO is good, but getting expensive.
It isn’t easy for a lay person, especially if things get complicated. On QBO you can use ‘locations’ and ‘classes’ or ‘projects’ to get the granularity you need. Easy for me, not easy for many! The landlord software presumably has bank feeds, so you should be able to categorise dividends, interest and pension contributions, but I have not seen how they handle filings for sole, joint, etc properties. You might end up having to use bridging software and plugging the figures in separately from the main software.
All this for something completely pointless from a taxpayer’s perspective and that nobody, apart from the government, has asked for!