Agents urged to support landlords with Making Tax Digital deadline

Agents urged to support landlords with Making Tax Digital deadline

Propertymark has called on letting agents to assist landlords approaching the April 2027 Making Tax Digital (MTD) for Income Tax deadline, which lowers the qualifying income threshold to £30,000.

Propertymark is urging letting agents to actively support landlords who will be affected by the upcoming change to Making Tax Digital (MTD) for Income Tax, which will apply to those with qualifying income over £30,000 from April 2027. This follows the current requirement for landlords with income over £50,000. The change means more landlords must maintain digital records and submit quarterly updates to HMRC using compatible software.

MTD for Income Tax currently applies to landlords whose combined turnover from self-employment and property income before expenses exceeds £50,000. From April 2027, this threshold will reduce to £30,000, and further to £20,000 in April 2028. Landlords whose 2025–26 tax returns indicate turnover above £30,000 may therefore need to comply with MTD requirements starting April 2027.

Propertymark highlights the role letting agents can play in helping landlords meet these obligations. Agents can undertake the MTD process on behalf of landlords, ensuring digital records are accurate and software remains connected to HMRC. Quarterly updates summarise income and expenses for the tax year to date and are not themselves tax returns or payments. Corrections to earlier records can be included in the latest update without resubmitting previous data.

Details of the Making Tax Digital process for landlords

HMRC requires landlords using MTD to keep digital records and submit quarterly updates through compatible software. These updates cover income and expenses for the tax year so far and allow corrections to previous submissions without resending all data. The next quarterly update deadline is November 7, 2026.

HMRC has stated that during the 2026–27 tax year, no penalty points will be issued for late quarterly updates, but all updates must be received before landlords can submit their full tax returns. This approach gives landlords some flexibility while they adjust to the expanded MTD requirements.

Propertymark advises letting agents to check that landlord statements are issued regularly and clearly detail rental income, fees, charges, and expenses. Agents are encouraged to raise awareness among landlords about the MTD changes and direct them to HMRC’s official guidance, especially for those nearing the £30,000 income threshold.

Context and implications for landlords and agents

The extension of MTD to landlords with lower qualifying income thresholds is part of the UK government’s broader digital tax strategy. It aims to improve tax compliance and reduce errors by requiring digital record-keeping and more frequent reporting. For landlords, this means adapting to new administrative processes and potentially investing in compatible software or professional assistance.

Letting agents, who often manage financial records and communications for landlords, are well placed to support compliance. Their involvement can ease the transition for landlords unfamiliar with digital tax reporting. Agents can also use this opportunity to review their processes for issuing statements and managing rental income data to ensure accuracy and transparency.

Smaller landlords with incomes just above the new threshold may find the quarterly reporting demanding, especially if they have not previously used digital accounting tools. Agents can help by recommending software solutions or offering to handle submissions on behalf of landlords, potentially strengthening client relationships.

Practical considerations for landlords and letting agents

Landlords should review their income levels for the 2025–26 tax year to determine if they will fall within the new MTD threshold from April 2027. Those affected need to ensure their record-keeping is digital and that they have access to compatible software connected to HMRC.

Letting agents should proactively communicate with landlord clients about the upcoming changes and deadlines. They should verify that statements provided to landlords clearly separate rental income, fees, and expenses, facilitating accurate quarterly updates. Agents may also consider offering MTD compliance services if they have the expertise.

Both landlords and agents should monitor HMRC guidance closely, as operational details and software requirements may evolve. While penalties for late quarterly updates are suspended for the 2026–27 tax year, timely submissions will be necessary to file tax returns.

Outstanding questions and future developments

Some uncertainty remains around how HMRC will enforce MTD compliance beyond the initial grace period and how software providers will support the specific needs of landlords with mixed income sources. The practical impact on smaller landlords and the extent to which agents will take on compliance responsibilities are also yet to be fully seen.

Further government updates and software developments are expected as the April 2027 deadline approaches. Landlords and agents should be prepared for possible refinements in reporting requirements and ensure they keep records in a format that can be easily adjusted.

What landlords and agents should do now

• Review 2025–26 income to assess if the new MTD threshold applies.
• Ensure digital record-keeping systems are in place and compatible with HMRC software.
• Letting agents should communicate changes to landlords and offer assistance with MTD submissions.
• Check that landlord statements accurately reflect rental income and expenses for easier reporting.
• Stay updated with HMRC guidance and software developments ahead of the April 2027 deadline.

Supporting landlords through Making Tax Digital with TLA

The Landlord Association (TLA) membership offers landlords and letting agents access to practical compliance resources and guidance relevant to Making Tax Digital. As the MTD requirements evolve, TLA’s developing property management platform, ORBIT, available in BETA testing, aims to help members organise rental income records, manage documentation digitally, and keep track of compliance actions.

ORBIT is designed to assist landlords and agents in maintaining accurate records and preparing for quarterly updates, providing a central hub for property management information. TLA members can explore these tools and access tailored support to meet the new digital tax obligations effectively.

Explore TLA membership and learn more about ORBIT BETA access to support your MTD compliance.

Looking ahead, landlords and agents should prioritise early preparation for the expanded MTD requirements to avoid last-minute challenges and ensure smooth submission of quarterly updates starting in April 2027.

Sources: Letting Agent Today