Agents and landlords now have less than a year to prepare for more frequent tax filing obligations under Making Tax Digital.
Under the new rules, which kick in on 6 April 2026, anyone with a gross annual income of over £50,000 from renting property or self-employment will have to change the way they do their taxes. They must create and keep digital records of their income and expenses using approved software, send quarterly updates to HMRC, and submit a tax return by 31 January the following year.
Landlords who are also self-employed should note that the threshold is for all qualifying income: if they earn £25,000 from rent and £25,001 as a sole trader, they fall under the new rules.
Those who earn less than £50,000 have longer to prepare: From 6 April 2027, anyone with a qualifying income of £30,000 or more will have to use the new system. The government plans to lower the threshold even more to £20,000 as of 6 April 2028, but hasn’t yet put legislation in place for this.
Around 780,000 people are expected to be affected from next year, and a further 970,000 from 2027, although not all of these will be landlords.
How can agents help?
The first step will be to make sure that landlords are aware of the upcoming tax changes. Helping them to understand their new obligations may let them avoid costly penalties from HMRC.
As an agent, you can also help your landlords compile accurate records of rental payments from their properties. With PayProp, it’s easy to produce accurate statements of all payments using real time, bank-accurate data.
