Call for landlords not to be punished over Making Tax Digital

Nearly nine in 10 landlords say they are worried about Making Tax Digital (MTD), with many unclear about its requirements and now one industry expert says they shouldn’t be punished for mistakes in the early stages of its roll out.

MTD is HMRC’s overhaul of the tax system that requires landlords who meet the criteria to keep digital records.

They must submit regular income and expense updates online rather than filing a single annual return.

Polling carried out by August, the landlord rental management app, suggests confidence remains low just months before implementation begins.

Among those surveyed, only 12.8% said they are very confident they understand what Making Tax Digital requires.

Nearly half reported deeper concern, with 32.1% saying they are not confident and 16.1% describing themselves as worried or concerned.

Don’t punish MTD landlords

The firm’s founder, Samuel Cope, said: “HMRC’s guidance hasn’t been practical or widely accessible enough for the average landlord and it’s showing.

“MTD is a seismic change, adding real cost and admin to a sector that already feels overwhelmed.”

He added: “I’ve written to the Treasury and the minister responsible for HMRC urging a substantial reduction in fines for early non-compliance, because the readiness gap is clear.

“You can’t punish people for confusion you helped create.”

Risk to MTD implementation

The survey shows that overall landlord apprehension is widespread with 87.5% expressing some level of worry.

That includes 35.7% who said they are very worried and 51.8% who are a little worried about the changes ahead.

August says the findings highlight a serious risk to smooth implementation.

While awareness of the shift to MTD is rising, the company says practical and usable guidance has failed to reach many landlords.

And that is leaving them anxious about an approaching compliance deadline they do not fully grasp.