It’s me again getting in a state about MTD?
1 week ago | 29 comments
Landlords could face monthly HMRC tax bills
9:03 AM, 15th July 2026, 2 days ago
21
Landlords could be required to pay tax every month under Treasury proposals that would calculate deductions using income declared in the previous year, the Daily Telegraph reports.
The move comes after the controversial Making Tax Digital (MTD) is already forcing thousands of property owners into a new quarterly reporting regime.
The government is consulting on plans that could allow HMRC to collect tax before some landlords and self-employed workers have received the income needed to pay it.
Monthly deductions would be based on the taxpayer’s previous annual return, with the resulting forecast liability divided into 12 payments.
Someone whose last return showed earnings of £30,000 could, for example, face deductions of £290 a month.
Planned for 2030
The system would apply to people earning above a threshold that has not yet been decided.
Labour plans to introduce the monthly payment regime from April 2030.
For landlords, the proposal could create problems where income changes sharply between tax years or varies during the year.
Voids, repairs, mortgage costs and late rent payments can all affect a landlord’s cashflow in any month.
Paying tax in poor cashflow
Zena Hanks, of accountancy firm Saffery, told the Telegraph: “For the self-employed, this is going to cause huge disruption to cashflow.
“The principles are sound, ensuring tax is paid closer to income being received, but you can’t predict future income easily.”
Self-employed taxpayers currently make payments on account twice a year, normally in January and July, based on their previous tax return.
Ms Hanks added: “It’s all very well HMRC issuing refunds, but taxpayers could have to pay more tax at a time when their business is under pressure.”
Making Tax Digital
The proposal follows the introduction of Making Tax Digital for Income Tax in April.
Eligible landlords and self-employed workers must now use HMRC-approved software and submit financial information four times a year.
The regime currently applies where qualifying income exceeds £50,000.
The threshold will fall to £30,000 next year and £20,000 from 2028.
Want landlord views
However, while quarterly submissions do not replace the annual tax return process, they do add another layer of record-keeping for landlords.
Making Tax Digital was delayed four times and ran £1bn over budget.
Its rollout has also prompted concern about whether HMRC could manage another major change to the way tax is reported and collected.
An HMRC spokesman told the newspaper: “Spreading tax payments more evenly through the year could help taxpayers avoid unexpected lump-sum bills and reduce the risk of falling into tax debt.
“We recognise that self-employed people and landlords can have fluctuating incomes, which is why we are consulting widely as we want to hear views on how potential reforms could work in practice.”
Tags:
HMRC landlord tax, landlord income tax, landlord monthly tax payments, Making Tax Digital landlords, property income tax, self-employed tax reform
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Is compensation culture coming to the PRS?
Member Since June 2024 - Comments: 18
12:56 PM, 15th July 2026, About 2 days ago
We live in a six unit HMO ,Ipswich falling room rents achievable so many new HMO properties. We are closing living in the house on our own given capital gains tax. some HMO Owners I know are closing and will quietly rent unregistered cash in hand, council will find them? I am advised they are not looking lack funding….. this government does not know the law of unintended consequences.
Member Since June 2015 - Comments: 345
1:44 PM, 15th July 2026, About 2 days ago
As long as your tax return is submitted promptly there shouldn’t be too much difficulty. The main problem with the in advance payment system is when accountants leave it until around Christmas to prepare the tax return and the January payment is way higher than expected. This year mine was around double what I was expecting and caused all sorts of problems trying to come up with a huge sum of money in just over a month.
For the year ending April 26 my accountant has managed to submit my tax return already, which has resulted in the July payment being reduced. Monthly payments may actually be helpful in that sort of situation.
Member Since May 2024 - Comments: 26
2:57 PM, 15th July 2026, About 2 days ago
Reply to the comment left by Judith Wordsworth at 15/07/2026 – 10:02
I’m very happy to pay NIC if that means that my rental income now are tested as earnings that qualify for pension payments.
Member Since January 2020 - Comments: 97
4:03 PM, 15th July 2026, About 2 days ago
How’s it going to work if your tennant stops paying you rent, and you have to not only have to pay your mortgage but also your tax bill each month. MTD was all about stopping the end of year mistakes in January and spreading the load throughout the year, so producing more accurate accounts. This quarters MTD filing was a doddle as we use PaTMa to do our property management, just wish it could help manage HMRC and all its mad ideas.
Member Since August 2021 - Comments: 318 - Articles: 1
4:09 PM, 15th July 2026, About 2 days ago
This just shows a complete lack of understanding of how the RRA will exaggerate the existing variability in our income streams and expenses.
For too many years the Treasury have encouraged HMRC to accelerate tax payment timetables. This is in addition to the inconsistent treatment of the PRS, where HMRC alternate between treating us as a business and treating our businesses as simply investments; which ever is to their benefit appears to be the deciding factor.
– All other self employed profits qualify for pension relief.
– Only the PRS owners suffer manufactured (higher) taxable profits due to S24 penalising us for borrowing risk capital to build and improve our business assets.
– Rather than allowing rollover relief so we can reinvest sales proceeds, the CGT is snatched from us, denying us the capital to build or refresh portfolios
– No-one else has to pay CGT within 60 days of a sale.
With tenancies now of uncertain tenure, rising compliance costs and the risk of waiting up to a year to remove non-paying tenants, all that any move to monthly payments will achieve is a surge of landlords to the exit.
When my capital can be invested in a liquid asset property, such as a REIT yielding 5% with a total annual return of 10%, in a tax protected wrapper – no repairs, references or tax return required – I am in the exit queue
Member Since May 2024 - Comments: 147
5:12 PM, 15th July 2026, About 2 days ago
Typical Labour government. They can’t even wait a few months for cash they’re desperate to spend immediately like a teenager on Red Bull…
Member Since May 2018 - Comments: 2223
5:54 PM, 15th July 2026, About 2 days ago
In the year in which the new EPC regulations came in the knock-on effects of the work (on what was actually already safe property) resulted in a massive drop in my net income compared to the previous year. So had the government taxed me on its assumptions that my income would be the same as the previous year the punishment would have been even more extreme.
The biggest problem with all proposals like this, including for example George Osbornes change stopping landlords from offsetting finance costs against rents, is that changes like this disproportionately penalise the small unincorporated landlords and favour the big incorporated landlords.
The only way landlords can respond to increased risks like this is to increase rents.
Member Since April 2024 - Comments: 23
6:20 PM, 15th July 2026, About 2 days ago
Why even worry they won’t be in come 2030
Member Since May 2018 - Comments: 2223
6:32 PM, 15th July 2026, About 2 days ago
Reply to the comment left by Adamufc1 at 15/07/2026 – 18:20
Small non-incorporated investors in residential property are already being penalised by the tax system: Limited companies can offset their finance costs against rents.
The deadline for paying corporation tax is 9 months and 1 day after the end of your accounting period. But the proposal is that if you are not incorporated and are receiving income from residential property you have to pay tax IN ADVANCE?!!!
When the government is trying to persuade you to invest money to improve your EPC rating from Band D to Band C? !!! When this is going to cost you thousands and you are already being penalised for raising capital?!!!
What IDIOT thought this was a good idea?
Member Since April 2024 - Comments: 4
9:36 PM, 15th July 2026, About 2 days ago
What not pay tax based on previous month income, why previous year, If they can force landlords to pay monthly, HMRC should do their part of the work monthly.