Landlords face higher costs with Making Tax Digital and need to prepare
5 months ago | 31 comments
Landlords spared late filing fines in first year of Making Tax Digital
9:45 AM, 6th February 2026, 2 months ago
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The government has announced it will support landlords transitioning to Making Tax Digital (MTD) by waiving penalty points for late submissions during the first 12 months.
Under the controversial scheme, from April this year, landlords earning more than £50,000 will be required to keep digital records and submit quarterly updates to HMRC using authorised MTD-compliant software.
With just two months to go until MTD launches, HMRC is ramping up its campaign to inform landlords of the upcoming changes.
Not receive penalty points for late quarterly updates for first 12 months
In a government press release, the government have said occasional slip-ups won’t result in hefty fines.
The press release said: “Customers joining MTD for Income Tax in April 2026 will not receive penalty points for late quarterly updates, for the first 12 months.
“Under the new system, penalty points will be given for each late submission, with a £200 penalty only applied once four points are reached. This means occasional slip-ups won’t result in immediate fines.”
Now is the time to act
HMRC are now urging landlords to install software for MTD as soon as possible.
Craig Ogilvie, HMRC’s director of Making Tax Digital, said: “With two months to go until MTD for Income Tax launches, now is the time to act. A range of software is available and the system is straightforward and helps reduce errors. Thousands of volunteers have already used it successfully.
“This will make it easier for sole traders and landlords to stay on top of their tax affairs and help ensure everyone pays the right amount of tax.
“Spreading your tax admin throughout the year means avoiding that last-minute scramble to complete a tax return every January. Go to GOV.UK and start preparing today.”
The government has also published guidance to help landlords find the right software for MTD, including a list of approved software providers.
Alongside this, a new online search tool has been launched, which asks a series of questions tailored to sole traders and landlords, before generating a personalised list of compatible MTD software options.
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Member Since July 2013 - Comments: 467 - Articles: 1
9:52 AM, 6th February 2026, About 2 months ago
Pointless, stupid idea to bring in Making Tax Digital.
Just scrap the whole thing please.
Member Since August 2013 - Comments: 788
11:50 AM, 6th February 2026, About 2 months ago
What is not clear is does this £50,000 limit apply to Rental Income only or combined income from other sources such as dividends, interest, or any other self employed income from business.
MTD is going to take more of our limited leisure time to make our life even more harder, by having to scan or upload all receipts and documents into a MTD software, do they not realise where will this extra time come from? There is only 24 Hours in a day and 8 of them needed for sleeping and 8 to 10 hours for working and and that means we now going to have to not only study the new Renters Rights bill but also get MTD software and learn how to use it and at 72 its not an easy thing for many of us, Fed up with modern day living as a landlord, time to quit renting..
Member Since April 2018 - Comments: 370
12:21 PM, 6th February 2026, About 2 months ago
Typical bull from a government mouthpiece.How very generous of them not fining people in the first 12 months.Not only will landlords pay more tax than anyone else but will have the pleasure of paying for software to do this on.
Knowing these crooks it would not surprise if non rental income was added in to push you over the £50K cap.
Member Since July 2013 - Comments: 467 - Articles: 1
4:32 PM, 6th February 2026, About 2 months ago
Reply to the comment left by David at 06/02/2026 – 12:21
It is added on, I believe.
Member Since July 2013 - Comments: 467 - Articles: 1
4:32 PM, 6th February 2026, About 2 months ago
Well done to 118 on this news. No other site appears to have picked up on this yet.
Member Since January 2026 - Comments: 1
6:37 PM, 7th February 2026, About 2 months ago
HMRC are not ready for this.
It takes them so long to reply to queries that anyone using the system is likely to miss two deadlines before getting clarification from HMRC
Also, managing agents need to be coached on the detail they need to provide to support each payment.
But at the end of the day MTD offers no advantage to landlords that are minotoring their income and expenditure on a monthly basis.
Currently there is a perfectly good system in place that allows a landlord (or any other taxpayer) to download bank data as a csv file and use that to generate the data to input into the HMRC website directly. I normally do that by the end of May each year.
Now I’m constrained to use commercial software that doesn’t suit my needs (more than 1 package is needed to cover all the classes if income) with all the inherent data security issues.
I’m not impressed with whoever thought this was a good idea. Its a nonsense. There is absolutely no advantage to me with MTD, just the propensity for the software to make mistakes.