Published: 10/11/2022 By Hannah McCormackIt has been reported that half of landlords in the UK are not aware of the new Making Tax Digital for Income Tax rules which will require many landlords to report their property income quarterly. Any landlord whose total gross income exceeds £10,000 will fall into this category and will need to use the new way of reporting their income via MTD compatible software. The £10,000 threshold is per taxpayer not per property and includes both rental properties and furnished holiday lets. Also, if you are self-employed and a landlord it’s not just your property income that is taken into account, if your combined turnover exceeds £10,000 you will have to comply with MTD and submit quarterly digital updates of your business and property income (and expenses) to HMRC.
Although delayed a year until April 2024 there is still a huge number of landlords who are not aware of the new rules coming into force. Landlords will be required to submit updates every quarter instead of submitting an annual tax return following the end of the previous tax year on 31st January. Instead, all that will be required by 31st January will be the end of period statement which is in addition to the new quarterly reporting.
HMRC have stated that each tax payer has individual responsibility to file via MTD. Therefore, if you own a property jointly it is still your responsibility to report your share of the income and expenses, you will still be required to keep digital records of your percentage of the total income and expenses and report individually as per the new MTD rules.
If you own more than one property you still only need one digital account, you do not need an account per property.
We strongly recommend getting set up with MTD compliant software sooner rather than later, to give yourself time to get used to the process before the deadline. Read our blog on MTD What’s Next for more info, or get in touch with our expert MTD accounts team who can guide you through the process. Visit our MTD page or call us on 020 8661 7878.