Tax rules are shifting, and landlords are right in the middle of it. HMRC’s Making Tax Digital for Income Tax (MTD) programme is rolling out across more areas, and before long, every landlord with taxable property income will need to comply.
Gone are the days when you could rely on paper records or leave your Self Assessment tax return until the eleventh hour. From now on, you’re going to need to have all of your records digitally stored and you’ll need to submit quarterly updates – this is the government’s plan to reduce errors in the tax system and make it fairer for everyone.
Now, we know what you’re thinking – this sounds like a lot of extra work. But it really doesn’t have to be. With the right tools, landlords can turn MTD into an opportunity to save time, reduce stress and get a tighter handle on their rental business. Here’s what’s coming, why digital record-keeping is unavoidable, and how Landlord Vision makes compliance simple.
What MTD Means for Landlords
MTD has been in place for VAT-registered businesses for a few years, and over the next few years it’s going to be expanded to include Income Tax Self Assessment (ITSA). This will affect landlords (not limited companies), sole traders and other people that earn self employment income above £10,000.
But what does this mean in practice? Here are the main features of MTD:
- Keeping digital records of all property income and expenses.
- Sending quarterly updates to HMRC via compatible software.
- Filing a final self assessment tax return online each year.
It all comes down to transparency and reducing mistakes. With a clear picture of tax throughout the year, HMRC are in a better position to give you an accurate forecast, and in return, you are able to budget for you tax bills with a bit more certainty. No nasty surprises.
However, it does come with more responsibility for landlords. If you miss any of your quarterly updates, you run the risk of penalties.
Let’s look at an example: Let’s say you are a landlord with three properties, generating a qualifying income of £18,000 a year. Under the new MTD rules, you will be required to send four quarterly updates, plus a final year-end return (and foreign property income has to be submitted separately). That’s at least five separate filings every tax year. If you also have a separate sole trader business, you will need to submit a a quarterly update for each income source.
It’s a big change – and one that landlords should prepare for sooner rather than later.
Why Digital Records Are Essential
Paper records might feel familiar, but they’re quickly becoming a liability. First of all, they can be a nightmare to sort through. Even the best filing system will be much slower to find a specific document than if they are digitised and a simple search will do it all.
On top of that, receipts fade, spreadsheets get messy or torn and things get lost. These issues aren’t just frustrating, they can cause you to miss deadlines and face punishments.
On the other hand, keeping your records digitally comes with so many benefits. For a start, they are more accurate. All of your income and expenses are logged automatically, with no errors. And once they are on, they are there for you to review at any stage, easy to find and saving you time.
You can also access your records from anywhere, either by using a cloud-based system, or even just having them on a laptop, which is much easier to carry around than boxes and boxes of files! With everything in one place, you know that it is all safe and secure.
You’ll find that keeping your records digitally will make other parts of your business run more smoothly as well, whether it’s applying for a mortgage, managing cash flow, reviewing rental income or dealing with tenant disputes.
How Landlord Vision Keeps You Compliant
If all of this seems a little overwhelming, don’t worry. This is where Landlord Vision can help. Our UK property management software has been specifically designed for UK landlords that want to stay compliant, but without having to radically change the way they work. Crucially, it is also HMRC-recognised software, which makes the entire process much more straightforward.
Here’s how Landlord Vision helps:
- Direct HMRC submissions: file Income Tax Self Assessment and VAT returns directly.
- Automated bank feeds: connect accounts to automatically track rental income and property expenses.
- Secure digital storage: upload tenancy agreements, safety certificates, receipts and invoices.
- Reminders and alerts: never miss a quarterly update or compliance deadline again.
- Reports and insights: see profit and loss, cash flow and tax liabilities at a glance.
For landlords running a rental business or managing a larger portfolio, LV consolidates everything into one system. No need for separate spreadsheets, bridging software or paper trails – just a clear, connected platform designed for property.
Other Legislative Changes on the Horizon
MTD isn’t happening in isolation. Landlords are facing a host of new and upcoming rules, all of which increase the need for organised digital management.
- Energy efficiency standards: proposals could see rental properties needing an EPC rating of C or above in the coming years.
- Renters Reform Bill: Section 21 evictions set to be abolished, periodic tenancies introduced, and tenants given more rights (including the right to keep pets).
- Safety checks: stricter requirements around fire alarms, electrical inspections, and gas safety.
- Data protection: with more tenant information stored online, GDPR compliance is a must.
Each of these creates more records, more deadlines, and more admin. Trying to manage it all manually is risky. Having everything in one secure software platform is the best way to stay on top of it.
Staying Ahead With Landlord Vision
Legislation will continue to evolve, and landlords need to be ready for whatever comes next. Landlord Vision provides that peace of mind by:
- Tracking compliance tasks across your properties.
- Setting reminders for safety certificates, inspections and renewals.
- Managing tenants, letting agents and expenses in one place.
- Updating features as new government rules are introduced.
Landlord Vision is designed to grow with your company, so whether you manage a single flat or a growing property portfolio, you’ll have the tools you need to make, not just your tax return, but your entire business run smoothly. Not only will you be well prepared for Making Tax Digital, but you will be future-proofing your business against new requirements in the industry.
Conclusion
As any good business knows, every challenge presents an opportunity. Many landlords will look at the changes that Making Tax Digital are going to enforce on business all over the country, and see them as a tiresome burden – but that isn’t looking at the big picture.
See this as an opportunity. Get reliable systems in place that will not only help your business stay compliant with these new changes, but they can help make so many aspects of your business run in a more efficient way. You will end up saving time and money – not to mention a lot of stress and hassle.Use Landlord Vision to take the complexity out of compliance, leaving you to focus on the more important matters. Book in for a free demo today to see what a difference it could make, and stay one step ahead. Then you can rest assured that you are fully prepared for Making Tax Digital.
