Landlords face first Making Tax Digital deadline
Landlords and sole traders are approaching the first quarterly deadline under Making Tax Digital for Income Tax, with accountants warning that widespread confusion persists over the new requirements.
The first quarterly submission deadline falls on 7th August, covering the period from 6th April to 5th July 2026, or 1st April to 30th June for those who elected calendar quarters.
Misconceptions widespread
Eriona Bajrakurtaj, Chief Executive of Major’s Accounts & Co, said: “The biggest problems we’re seeing come from misconceptions about what’s required. Some people think it doesn’t apply to them, while others believe they’ll have to pay tax every quarter or can simply submit placeholder updates to HMRC and sort everything out at year-end.”
Making Tax Digital became mandatory from 6th April this year for landlords and sole traders with qualifying income above £50,000. The threshold will fall to £30,000 from April 2027 before reducing to £20,000 from April 2028, bringing almost all landlords within its scope.
Affected taxpayers must keep digital records and submit quarterly updates to HMRC using compatible software, rather than relying on traditional annual self-assessment reporting. The change comes as landlords face mounting administrative pressures across multiple regulatory fronts.
Penalties deferred
HMRC is not issuing late-submission penalties for missed quarterly updates during the first year of Making Tax Digital. However, taxpayers who repeatedly miss deadlines from 2027/28 could face £200 penalties under a new points-based regime.
Bajrakurtaj advised taxpayers to “start at the beginning of each quarter filing, choose HMRC-compatible software and build simple habits that make record-keeping part of your routine rather than something you only think about when a deadline is approaching.”
She noted that with wider changes affecting landlords, including the Renters’ Rights Bill, having a real-time view of income, expenses and cash flow can help property owners stay organised and manage their portfolios more effectively. The administrative burden comes as market conditions remain challenging for property investors.
The phased rollout of Making Tax Digital for Income Tax represents a significant shift in tax administration for the buy-to-let sector, with the majority of landlords expected to fall within scope by 2028.
