Majority of landlords remain ignorant of when tax changes will apply
Confusion continues to reign surrounding landlords’ obligations around Making Tax Digital for Income Tax, with less than half (48%) of landlords with qualifying income this year believing they are part of the scheme and only 28% of those due to join next April realising they will be liable from that time.
Meanwhile, three-quarters of those landlords in scope of the new obligations expect it to add at least four hours of work every quarter, according to research from property management platform August.
Its Landlord Survey also found that only just over a third (35%) could name their correct MTD start date. The survey gathered responses from 276 landlords across the UK in September, asking landlords when they thought they had to start using MTD and their gross income from property and self-employment.
Among landlords reporting income of £50,000 or more, who have been required to keep digital records and file quarterly updates since April 2026, fewer than half (48%) said they were already in MTD, while a similar proportion (44%) believed they start later or fall below the thresholds. 8% did not know.
From April 2027, landlords with income between £30,000 and £49,999 are eligible for the MTD scheme, but less than a third (28%) knew they would be liable. Instead, nearly two-thirds (64%) named a different date. In the £20,000 to £29,999 band, due to join in April 2028, only 11% named the right year and 36% didn’t know when it would apply to them.
Hours of extra work
Of those in scope for MTD, three-quarters (75%) expect MTD to add at least four hours of work every quarter and a third (34%) expect it to take more than a day. Only 6% expect it to take less than an hour. Of those already part of the scheme, 83% say they submitted their first quarterly update on time and 12% submitted it late.
How landlords are keeping their digital records also varies. 28% leave it entirely to their accountant, 26% use general accounting software such as Xero or QuickBooks, 25% use dedicated landlord software and 14% run a spreadsheet with bridging software. Self-managing landlords are more likely to do it themselves, while those who use a letting agent lean heavily on their accountant (42%).
Richard Samuel, chief executive of August, said he was surprised by the scale of the gap the research identified. “These are not disengaged landlords. Three-quarters of our respondents own five or more properties and most have been letting for over a decade. If half of them don’t know they are already inside the regime, the position among the sector’s smaller landlords is likely to be worse. The 2027 wave is six months away and brings in a far larger group. HMRC, accountants and software providers have a short window to make sure landlords know when their obligations start and what a quarterly update actually involves.”
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