Surprisingly HM Revenues & Customs has just announced that landlords will be given further support on their tax matters.

Image credit: Unsplash

HMRC is allowing businesses and landlords to have a year’s extension to become fully ready and able to ‘cope’ with its Making Tax Digital scheme. The tax ‘initiative’ is for businesses, investors and landlords who submit self-assessment forms with incomes over £10,000 and was supposed to be starting from April 2023; this has now been extended to the beginning of April 2024.

The HMRC’s change was decided after receiving feedback from businesses and landlords with property portfolios.

A spokesperson for the broker says: "For a typical landlord Making Tax Digital will move them from making one tax submission a year to having to file five - one every quarter and one at the end.  The new deadline of April 2024 instead of 2023 will be some respite.

"Our advice though to landlords is to use this time wisely.  Begin by keeping good income and expenditure records every quarter from now if you don’t already do this and think about sourcing software that can help. 

“Our fear is that Making Tax Digital will have passed many landlords by as an issue they need to prepare for not just in terms of the additional time it will take but resources in the form of software and possibly the added support of an accountant."

When ‘Making Tax Digital’ is actually implemented, landlords under the scheme must provide the HMRC with quarterly updates of their expenses and income.

At the end of the fiscal year landlords will no longer be required to complete  a self-assessment tax forma, and instead will have to sign a declaration that their quarterly returns are correct. They will also be given until January 31st of the following year to pay their tax.

Regarding the quarterly figures landlords must provide the information via MTD to the HMRC within a month of the relevant quarter’s end, as well as the yearly declaration on January 31st for the previous tax year’s figures.