The new Making Tax Digital (MTD) tester initiative?
2 years ago | 9 comments
Landlords must comply with Making Tax Digital or face fines
12:03 AM, 28th March 2025, 1 year ago
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The Labour government will force landlords to use the Making Tax Digital (MTD) scheme for income tax self-assessment or face fines if they fail to pay on time.
The controversial scheme will lower the qualifying income threshold for MTD to £20,000 from April 2028, forcing more landlords with modest rental income to keep digital records and file their taxes using MTD-compliant software.
Landlords earning more than £50,000 will need to comply from April 2026, while those earning more than £30,000 will join from April 2027.
Property118 has published numerous articles on the MTD scheme, with many landlords highlighting that they are struggling to find compliant software programs.
MTD places UK businesses on a digital footing
In the Chancellor’s Spring Statement policy paper, the government claim the MTD scheme will transform the way tax is managed.
The document says: “The government is confirming the continued rollout of Making Tax Digital (MTD) for income tax self-assessment (ITSA), with sole traders and landlords with qualifying income over £20,000 joining from April 2028.
“MTD places UK businesses on a digital footing, prepares them for the future, gives them the tools they need to succeed in an increasingly competitive landscape, and ensures they can benefit from a modern, digital service when managing their tax affairs.
“The government will continue to explore how it can best bring the benefits of digitalisation to more of the around four million taxpayers who have income below the £20,000 threshold.”
Cost the government £120 million
The government have also confirmed they will increase late payment penalties for VAT taxpayers and income tax self-assessment taxpayers as they join MTD from April 2025 onwards.
The government claim the penalties will encourage taxpayers to pay on time.
The rollout of MTD for Income Tax and the expansion of late payment penalties are expected to cost the government £120 million by 2029.
Tags:
Digital Tax Filing UK, government, Income Tax Self-Assessment, Landlords, Late Payment Penalties, Making tax digital, Making Tax Digital for Landlords, MTD, MTD Compliance 2026, MTD Software Solutions for Landlords, UK Landlord Tax Requirements, VAT
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Member Since May 2024 - Comments: 204
4:49 PM, 29th March 2025, About 1 year ago
Reply to the comment left by Simon Lever – Chartered Accountant helping clients get the best returns from their properties at 28/03/2025 – 13:09
I don;t know how the government can keep a straight face when they say it’s going to simplify things.
I’ve been dreading this coming in next year.
I employ an accountant to do my tax as I don’t understand it and don’t want to make mistakes.
I wouldn’t trust my accountant to change an engine on our companies aircraft and I don’t trust myself not to make a mistake on my tax return.
Anyone already using MTD software? If so, what is the easiest to use. I’m going to need some time to try to learn how to use it.
Thank you
Member Since July 2013 - Comments: 463
5:06 PM, 29th March 2025, About 1 year ago
Reply to the comment left by Paul Essex at 28/03/2025 – 15:37
This problem of holidays has been faced by business people for decades: they just pay someone else to run the payroll, pay invoices and submit monthly VAT returns.
MTD is bloody annoying and can only add to the sense that landlords are viewed by Government as essentially an unpleasant necessity, a cash cow, a branch of social services, etc etc. They want your income, your capital to save then having to invest in social housing, and then tax you on capital gains without any inflation-proofing. They also want your unpaid labour, to act as data entry clerks, as immigration officials and anti-social behaviour enforcers, as the forgiver of unpaid rent and property vandalism, and now as net zero warriors. EPC level C by 2028? That’s tens of thousands in insulation and air source pumps, all in return for no financial gain. No thank you – I’m selling up!
Member Since August 2023 - Comments: 10
6:51 PM, 29th March 2025, About 1 year ago
I love the Government’s No carrot and big stick approach to everything. At present, there is no real easy to use compliant software. Any account’s software requires the user to be an accountant to setup, update and run. After all that, anyone makes a mistake, the government will guarantee the stick.
I strongly suggest that landlord’s need to understand that this is a cost. Buy or subscribe for the software, pay someone to setup, update and run this software.
Add this cost in your quarterly digital returns and hopefully the government will realise that they are not gaining but losing money. For now, we are earning less and therefore paying less tax.
In other words, first opportunity, become professional in everything and if it means increase in costs, don’t be frightened. Take a hit and add it towards the management of your property(ies).
Member Since September 2018 - Comments: 3538 - Articles: 5
11:11 AM, 31st March 2025, About 1 year ago
Reply to the comment left by Rakesh Joshi at 29/03/2025 – 18:51
….the issue being ultimately you need a tenant to be able to pay this…so actually you end up self capping the rent so that you don’t have costly voids, meaning your income reduces but your costs increase. So then what? You subsidise a tenant to live there?
I’M NOT A SOCIAL HOUSING PROVIDER!