Concerns Grow Over Making Tax Digital for Landlords

Summary: As Making Tax Digital (MTD) deadlines approach, many landlords are anxious about adapting to new digital reporting requirements. The challenge of finding simple, cost-effective software that integrates with existing accounting tools like Xero is a common concern among property owners.

Landlords Face Pressure as MTD Submission Deadlines Near

Many landlords are feeling overwhelmed as the first submission dates for Making Tax Digital (MTD) approach. One landlord, Denise, shared her experience of realising she has yet to prepare for the 2027 deadline, despite the looming requirement to submit rental income digitally to HMRC.

At 73 years old, Denise describes herself as a “techno dinosaur” and is apprehensive about moving away from her long-established system of manually tracking income and expenses using self-designed Excel spreadsheets and physical receipts. The prospect of adopting new digital tools has caused her considerable anxiety.

Exploring Software Options to Comply with MTD

Denise consulted her brother-in-law, who recommended finding software compatible with Xero, the accounting platform he uses. She trialled Landlord Studio’s free version, inputting details for four properties, tenants, rental amounts, and ownership shares. Despite some progress, the software’s additional features—such as marketing tools and online rent collection—seem unnecessary and add to the cost.

She emphasises that her primary need is a straightforward digital tool that records and evidences rental income and expenses for HMRC submissions, without extra frills. Denise is seeking recommendations for simple, affordable software that integrates with Xero and meets MTD requirements.

Background: The Shift to Digital Tax Reporting

Making Tax Digital is a government initiative aimed at modernising tax reporting by requiring businesses and landlords to keep digital records and submit returns electronically. For landlords, this means moving away from traditional paper-based or spreadsheet methods to compliant software solutions.

While MTD aims to simplify tax processes, many landlords find the transition challenging, particularly those less familiar with digital tools or managing multiple properties. The need for software that is both user-friendly and cost-effective is a recurring theme in the sector.

Practical Implications for Landlords

Landlords must begin preparing well in advance of their MTD deadlines by selecting appropriate software and ensuring their records are digitised. Integration with existing accounting platforms like Xero can ease the process, but it is important to avoid paying for unnecessary features.

Keeping track of income, expenses, and ownership shares digitally will be essential to meet HMRC’s requirements. Landlords should also consider how their chosen software supports evidence retention and reporting for compliance purposes.

How TLA Can Help Landlords Prepare

As landlords navigate the complexities of Making Tax Digital, practical support can make a significant difference. TLA membership offers access to compliance resources and guidance tailored to the evolving demands of the private rented sector.

TLA is currently BETA testing ORBIT™, its new property management and compliance platform designed to help landlords organise their property portfolios, manage essential documents, and maintain records of income and expenses in one place. While ORBIT™ is still in development, it aims to simplify compliance tasks and support landlords adapting to digital reporting requirements.

Members can explore resources that assist with preparing for MTD submissions and integrating property management with compliance activities. For those interested, it is worth reviewing TLA’s compliance support and learning more about ORBIT™ BETA access to better prepare for upcoming regulatory changes.

Denise’s concerns highlight a common challenge among landlords: finding straightforward, affordable digital tools that meet MTD obligations without unnecessary extras. As the sector adapts, support from organisations like TLA can provide valuable assistance in managing these changes effectively.