What is Making Tax Digital?

Making Tax Digital for Income Tax has been introduced by the Government to streamline the process for certain landlords and/or sole traders when completing and submitting income and related expenditure to HMRC.

Affected landlords must complete and submit this information to HMRC in digital format via software which has been pre-approved by HMRC. Manual submissions be it directly or via appointed accountants will no longer be accepted.

Beresfords have partnered with Nexus by Landlord Studio whose software has been pre-approved by HMRC. It is designed to make the transition simple for those landlords whose properties we managed on their behalf. Relevant information which is stored within Beresfords own system such as income and most expenditure flows seamlessly into Nexus software. This means landlords do not have to process so much information manually themselves other than whatever they may hold directly.

Download an overview of Nexus

Which landlords are affected?

Any unincorporated landlords are liable as are others with any form of self-employed status outside of property. Unincorporated landlords are those who own property investments in their own name rather than that of a limited company. Incorporated landlords are not liable for MTD as their tax status is treated differently by HMRC.

MTD is being introduced in three phases based on the level of ‘qualifying’ income being declared.

Qualifying income means total gross income be it from property investments, other forms of self-employment or both combined where relevant.

What actually changes for Landlords?

Qualifying landlords need to record information digitally within HMRC approved software. Any income and related expenditure must then be submitted to HMRC every quarter rather than once a year. A final declaration will also be required at year-end which allows a landlord to include any additional information or amendments.

During the year, compatible software uses those digital records to produce quarterly updates.

HMRC describes these updates as summaries of property income and expenses rather than four separate tax returns.

Each quarterly update is cumulative, covering the period from the start of the tax year up to the end of the relevant update period. The relevant submission periods are shown below.

How do Beresfords support landlords?

Beresfords work with landlords across Essex, from those with a single property investment to others with larger sized portfolios. For those properties which we manage on a landlord’s behalf, relevant information for MTD purposes transfers securely from our systems directly into Nexus. Undoubtedly this will save those landlords concerned a significant amount of time.

Making more of the records behind a managed tenancy

Beresfords property managers oversee all maintenance- based matters which arise on a property that we manage on a landlord’s behalf. This includes processing related invoices and any rent received. Where a Nexus account is active relevant information for MTD purposes automatically transfers from Beresfords software. Therefore, from a landlord’s perspective it becomes less labour intensive, reducing the need to work through individual entries for income and expenses. For landlords with multiple properties or larger portfolios everything is in one place, easily accessible and recorded in a consistent format suitable for HMRC.

How much does Nexus cost?

£12 + VAT per month or £120 + VAT per year

There is no additional charge simply because you have more properties within your portfolio.

You can try Nexus with a 14-day free trial.

Get started with Nexus

If you would like to understand how it works first, download the digital overview. It explains how the service brings relevant property-based information into a MTD workflow.

Download our Nexus overview

How do I get started?

Get started with Nexus

Important information

Nexus provides software to help landlords maintain digital property records and make tax submissions. Neither Nexus nor Beresfords provides individual tax advice through this service. If you are unsure how Making Tax Digital applies to your circumstances, check the latest HMRC guidance or speak to your own accountant or tax adviser.

You can read HMRC's official overview here:

HMRC: Use Making Tax Digital for Income Tax

First established in 1968 we are one of the largest privately owned Independent agents in the South East. With branches across Essex and Greater London, Beresfords combine local market knowledge and expertise with national recognition for excellence. As a multiple award-winning agent who has a proven track record spanning 5 decades we are very well placed to offer sound and reliable advice whilst at the same time  consistently delivering positive results for our clients. Don’t take our word for it – see what hundreds of our clients have had to say. https://www.trustpilot.com/review/www.beresfords.co.uk

We are here to guide you through Making Tax Digital and all things lettings based. To discuss how Making Tax Digital affects you, or to explore further the benefits of using our fully managed service, contact your local Beresfords lettings team today.