Making Tax Digital (MTD) for Landlords

Making Tax Digital (MTD), “a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs”, will impact landlords from April 2024.

Keep reading as we explain the key pieces of information landlords need to know and how our specialist landlord accountancy package can help you. To send us an enquiry, please complete the short form here, or call our friendly team on 0808 301 2389.

From April 2024, if you are a landlord earning over £10,000 from your rental properties, you will be required to digitally record your business activities and submit Income Tax updates to HMRC. While this may sound quite daunting – please do not worry. Bluebird Accountancy has an exceptionally valued accountancy package, especially for landlords (from only £35.00 per month), and more information is available here. Income Tax updates to HMRC.

So what will landlords be required to submit to HMRC as part of Making Tax Digital from April 2024?

All landlords with an annual turnover greater than £10,000 from rental properties will need to submit a digital tax return, including four quarterly returns and an end-of-the-year final declaration (which will show any relief or allowances that may apply). This information will need to be submitted using the HMRC Making Tax Digital portal.

If you’re a landlord, you don’t have to wait until April 2024 to start the process of using Making Tax Digital to submit your returns to HMRC.

HMRC has introduced a two-sanction system with Making Tax Digital, where you could generate points which will determine how much of a fine you have to pay – should you fail to meet the correct MTD requirements.

Filing late

You will receive points if you file your quarterly returns late and/or your annual return. You will be fined should you file two annual returns late or if you file four of your quarterly returns late.

HMRC may issue you a £200 fine if you reach any of the above thresholds, and this fine could be increased if you continue to submit information beyond the specified deadline. If you are efficient with your filings, you’ll be reassured to know that the point system will reset to zero after periods of consecutive submissions where you meet the deadline.

Paying penalties

Once payment is due, a 5% penalty occurs if it’s not settled within 30 days. If you act quickly, having discovered you have been penalised, it’ll work in your favour. HMRC will entirely remove late penalties if they receive full payment within 15 days of the issue date, and if you arrange payment between 16 and 30 days, the penalty could be halved.

If you believe a penalty has been applied unfairly, you have the right to appeal and should HMRC deem your excuse reasonable, you will be eligible for relief and an extended time to pay – should this be necessary.

If payment is over 30 days late, HMRC will apply interest, and this will continue to accrue over time. Therefore, if you face a late penalty, you should appeal it or pay it as quickly as possible.

Bluebird Accountancy has a specialist landlord accountancy service that is perfect for anyone with a buy-to-let property (from one to over a dozen). Starting from only £35.00 per month, we can help you with every aspect of processing your tax returns and managing the new Making Tax Digital requirements – including registering with HMRC and processing quarterly and annual returns. You will also receive unlimited support from a dedicated Account Manager who will be on hand to answer any queries you have about your taxes, compliance and MTD.

Our package will also grant you access to an industry-renowned and state-of-the-art portal designed exclusively for landlords*. Once you have logged in via a web browser or the mobile app, you can see live bank information, get help with your bookkeeping and view your tax information.

For more information about our landlord accountancy service and to request a tailored quotation, please submit an enquiry using the form on this page, or call our friendly Sales Consultants on 0808 301 2389.