Landlords have just two days to meet key tax deadline – Mortgage Strategy

Landlords who earn more than £50,000 a year from properties held in their personal name have been warned they have just two days left to meet a key tax deadline.

Sole traders and landlords who earn over this threshold from self-employment and property income have until Friday to make their first quarterly report to HMRC under the new Making Tax Digital (MTD) for Income Tax regime.

In total, 864,000 sole traders and landlords are in scope for the first MTD deadline.

The programme will then be extended to those earning more than £30,000 from April 2027 and to those earning more than £20,000 from April 2028.

MTD for Income Tax is now a legal requirement and those taxpayers in scope should check they are signed up, that their software is compatible and their MTD summary is submitted on time.

No penalties will be issued for late quarterly updates during the first year of the new rules.

However, from the second year onwards, points-based penalties will apply where taxpayers miss a deadline.

Taxpayers will receive one point for each missed quarterly deadline.

A fine of £200 will be issued if they accumulate four points.

BDO private client services tax partner Elsa Littlewood says: “Getting ready for MTD for Income Tax has been a bit of a headache for accounting firms – and taxpayers who are unrepresented may also find the process challenging at first.

“However, there are some good explanatory materials on the gov.uk website to help.

“The first reporting deadline comes at a rather inconvenient time when many people will be trying to enjoy their summer holiday.

“It will be interesting to see what proportion of taxpayers actually meet the deadline, particularly if no penalties will apply in the first year.

“This could be key in determining whether HMRC is able to stick to its plan to extend the programme in 2027 and 2028.”

She adds: “This week HMRC closed a consultation on timely payments in income tax self assessment.

“This envisages bringing forward tax payment deadlines from April 2029 onwards for those taxpayers within the self assessment regime.

“While the rules are not yet set in stone, we could conceivably see payment demands being brought forward to coincide with quarterly MTD reporting deadlines in the future – or even an entirely separate set of payment deadlines, adding yet more complexity.”