Making Tax Digital (MTD) for landlord income tax

How does Making Tax Digital affect landlords?

If you have £10,000 or more of income (revenue, before expenses, not profit) across your property (held in personal names) and all sole trader businesses...

Then from April 2024 you'll be required to follow the Making Tax Digital for Income Tax and Self Assessment rules.

The Making Tax Digital brand also covers other types of tax, VAT being one of the most prominent. As a landlord it's most likely Making Tax Digital for Income Tax and Self Assessment (MTD for ITSA) will be the first that affects you.

What do you need to do for Making Tax Digital (as a landlord)?

  1. Maintain electronic records.

    Financial transactions must be tracked individually so that all totals later submitted to HMRC have a full breakdown available. Simply use PaTMa in the normal way to keep all the property records you need.

  2. Make quarterly submissions (for property).

    PaTMa will email you a reminder at the end of each tax quarter. All you'll need to do is check your records are complete, review the totals and click a button to send the details to HMRC.

  3. Make an annual statement (for property).

    After the final tax quarter PaTMa will prompt you to review any final details and make your end of period (covering the tax year for property) statement - confirming these numbers to HMRC.

  4. Finalise your self assessment tax return via MTD.

    This process is similar to an existing self assessment submission - it brings together all of your personal income related information for the year. Your existing MTD submitted records will be included automatically and other details will need to be entered manually, as they currently are.

How does PaTMa help landlords with Making Tax Digital?

PaTMa helps you to keep all the accounting records required for Making Tax Digital, in a single place alongside all your other property management records.

You'll only need to enter details once, in the existing landlord friendly PaTMa interface, using words you understand as a landlord. PaTMa lets you think like a landlord and keep all your accounting records automatically, without needing to understand accounting terms.

PaTMa is in the HMRC pilot for MTD for ITSA and will fully support all required tax submissions. If you'd like to get ahead and volunteer to be part of the ongoing pilot, please get in touch.

Does MTD affect rental property held in a limited company?

Other parts of Making Tax Digital may affect limited companies that hold and rent property. However, Making Tax Digital for Income Tax and Self Assessment does not directly affect limited company held property.

What is Making Tax Digital (MTD) for Income Tax and Self Assessment (ITSA)?

Making Tax Digital for Income Tax and Self Assessment is the requirement for everyone with £10,000 of more of income (revenue, before expenses - not profit) across property and all sole trader businesses, from April 2024, to maintain full electronic records and submit required information to HMRC every quarter.

Maintaining business (including property) records in suitable software should mean the MTD submissions are very simple and straight forward, with little additional overhead beyond keeping good records.

What is the PaTMa and HMRC MTD for ITSA pilot?

HMRC is running a MTD for ITSA pilot in the two years leading up to April 2024. Initially those eligible for the pilot will be restricted to people with relatively simple tax situations. Gradually HMRC will be accepting more complex tax situations.

If you'd like to be involved with the pilot or to find out more, please get in touch.