Making Tax Digital: What landlords need to know and how letting agents can help

Making Tax Digital (MTD) represents a significant change for landlords, introducing digital record-keeping and more frequent reporting to HMRC. With the first phase of the scheme now underway, understanding what is required and preparing in advance can help make the transition much easier.

At Beresfords, our Residential Lettings team is on hand to help landlords understand the changes, identify the steps they need to take and navigate the new requirements with confidence.

The changes are being introduced in phases, based on a landlord’s gross qualifying income. Under the requirements outlined in the government’s rollout, unincorporated landlords with qualifying income above £50,000 based on the 2024 to 2025 tax year fall within the first phase, which began in April 2026.

The income thresholds are then scheduled to reduce to £30,000 from April 2027 and £20,000 from April 2028.

Landlords who own properties through a limited company are outside the scope of these changes, so their position remains unchanged under the rules described here.

If you also have income from self-employment, this may need to be considered alongside your property income when establishing whether you meet the qualifying threshold.

One of the biggest differences is the move away from relying solely on an annual Self Assessment return. Affected landlords will need to maintain digital records of their qualifying income and related expenditure, submit quarterly updates to HMRC using compatible software and complete a final submission to confirm their figures, including any relevant allowances or additional income.

Keeping records up to date throughout the year can help make each reporting period more manageable, rather than leaving everything until the end of the tax year.

It is also important to understand the reporting deadlines and ensure the correct software is in place. HMRC does not provide the financial reporting software needed for this purpose, so landlords will need to choose a suitable solution.

For landlords who use a fully managed letting service, their agent can play an important role in helping them prepare.

As Steven Bond, Managing Director of Residential Lettings at Beresfords, explains:

“Letting agents who work with their landlords on ‘fully managed’ terms should be able to provide most of the data required, but they will not have access to everything, nor do they retain a detailed knowledge of a landlord’s entire financial picture, and for these reasons are unable to complete returns on behalf of their landlords.”

Your letting agent may be able to provide details of rental income and relevant property expenditure recorded through the management of your property. However, you will still need to account for other qualifying income, expenses and financial information that your agent does not hold.

This makes it particularly important to understand what information is available from your agent and what you will need to maintain yourself.

Having an appropriate digital system in place can help simplify the process and reduce the risk of missing important information.

Beresfords works with Nexus, by Landlord Studio, as its nominated software partner. The solution integrates with Beresfords’ CRM, allowing relevant property income and expenses to be transferred into a suitable format. Landlords can then log in, add any additional information and submit their updates to HMRC.

Finding a system that works for your circumstances and becoming familiar with it early can make ongoing reporting much easier.

Meeting the relevant deadlines is important, particularly as a points-based penalty system is scheduled to apply from April 2027, alongside financial penalties for repeated missed deadlines and late payments.

While Making Tax Digital may initially feel daunting, getting organised early can help landlords approach the changes with greater confidence.

Steven Bond adds: “Our team are fully up to date in terms of Making Tax Digital and equipped to provide reliable advice linked to MTD. Although it represents a significant change in terms of how a landlord submits relevant information to HMRC, there is nothing to fear. Once set up properly, it could be argued that digital reporting will in fact prove to be much easier and time efficient for landlords.”

At Beresfords, we understand that staying on top of changing legislation is an important part of being a landlord. Our Residential Lettings team can help you understand the implications for your property portfolio and identify the information you may need to prepare.

If you have questions about Making Tax Digital or would like to discuss our fully managed lettings service, get in touch with our team.