Making Tax Digital For Landlords Postponed

Making Tax Digital for Income Tax Self-Assessment (ITSA) for self-employed businesses and landlords with an income of more than £50,000 has been postponed by HMRC until April 2026.

For lower earners who earn between £30,000 and £50,000 making tax digital will be postponed even further until April 2027. Most landlords will be able to join the scheme voluntarily before it becomes compulsory if they choose, so that they can get a head start on the requirements, helping to eliminate errors and save time managing their tax affairs.

Making Tax Digital for Income Tax Self-Assessment (ITSA) was developed by the Government in an effort to increase efficiency and cut down fraud. It was announced in 2015 and requires that quarterly, rather than annual reports of self-assessment tax are made, using Making Tax Digital (MTD) compatible software such as Sage and Xero. HMRC will then have an estimated tax calculation based on the information provided to help budget for tax. At the end of each year, any non-business information can be added and then the tax can be finalised. This will replace the traditional Self-Assessment tax return.

Prior to the announcement of the postponement, Making Tax Digital for Income Tax Self-Assessment was due to come into force next year in April 2024 for customers with a total gross income over £10,000 from self-employment and property in a tax year, with partnerships starting to have to use the system the following year in 2025.

A review is also due to take place into the needs of smaller businesses, particularly those under the £30,000 income threshold and will consider how Making Tax Digital for Income Tax Self-Assessment can be developed to meet the needs of smaller businesses and how they will need to fulfil their Income Tax obligations. The review will also be used to develop the approach for any future rollout of Making Tax Digital for Income Tax Self-Assessment.

The Government is expected to fully update the guidance on Making Tax Digital for Income Tax soon.

Contact us online or call 0161 511 5339 for advice on the tax implications of renting property, or to arrange a complimentary Compliance and Performance Review of your current portfolio.