Making Tax Digital a legal requirement for landlords
Informing landlords about the legal requirements of Making Tax Digital, securing compliance with HMRC regulations
You should already be aware that the Government intends to move everyone over to a new online-only tax filing system through its Making Tax Digital (MTD) plan. This was most recently amended in December 2022.
It requires individuals and businesses to submit quarterly returns to HMRC via MTD compatible software and it will apply to self-employed individuals and landlords with annual business or property income of:
more than £50,000 from 6 April 2026
between £30,000 and £50,000 from April 2027
If your income is under £30,000, you will not be mandated to use the scheme until a review into how it can be shaped to meet the needs of smaller businesses has been completed.
If you own property jointly – for example as a married couple – then you can each earn up to the minimum threshold (including any other income) before you need to use MTD.
The pilot scheme is up and running, so it’s worth looking into exactly what’s required now and discussing it with a property tax expert so you can make sure you have the most appropriate software ahead of the requirement coming into force.
You may also find it useful to read our guide, Advice on UK landlord tax: the complete guide for 2023/24.
Things can go wrong at any point when letting a property, and the best preparation is to make sure you have full insurance coverage.
Although there is no legal obligation for a landlord to take out a dedicated residential landlord insurance policy, it’s important to know that a standard homeowner’s policy is highly unlikely to cover damage to a rental property. In addition, lenders will often require landlord insurance as a condition of the mortgage.
Landlord insurance protects you against the risks involved with letting a property. Our guide to finding the best landlord insurance coverage for you is available here.
As a general rule, you’ll want a policy that covers loss of rent, theft by tenants and property owner’s liability for things like an injury at the property or damage to your possessions.
With a higher level of cover, as provided by our own Total Landlord Insurance Premier policy, you can also expect cover for malicious damage by tenants and their guests, as well as support for extensive property disputes.
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You can also listen to this episode of The Property Cast, where we unpack the year’s top property stories with award-winning property journalist and Head of Content at LandlordZONE, Nigel Lewis.
Nigel is joined by Eddie Hooker, Founder and CEO of Total Landlord, and Paul Shamplina, Founder of Landlord Action.
Tune in to listen to their lively and insightful discussion and hear their top tips for 2024 and beyond.
