Millions of renters could face yet another squeeze on their budgets as a major tax overhaul collides with widespread landlord confusion.

A new survey indicates that most landlords are nowhere near ready for Making Tax Digital (MTD), the government’s new reporting system due to start in April.

Only one in eight say they properly understand the rules, while nearly nine in ten admit they are anxious about the changes.

The findings add to growing fears about the impact on tenants and recent research by August revealed that 97% of landlords intend to raise rents, citing rising compliance and administrative costs as part of the reason.

Under MTD, landlords will have to submit details of rental income and expenses to HMRC every quarter using approved software. Errors, missed submissions or inaccurate information could all trigger penalties.

With the deadline looming, industry specialists are warning that landlords who fail to prepare for the new system are far more likely to rack up penalties, pay for professional help, or face rising administrative costs — expenses that often end up being passed on to tenants rather than absorbed.

A spokesman for a trade body cautioned that the reforms could push more landlords out of the sector altogether, tightening supply and putting further upward pressure on rents.

He warned that the new system risks punishing ordinary landlords for genuine, unintended errors and said: “The problem isn’t that landlords don’t want to comply, it’s that the system is too complicated.
With apps landlords can see exactly what HMRC needs, track everything automatically, and submit updates directly from the app. When reporting is easier, landlords make fewer mistakes, and that helps keep costs down for tenants too.”