Making Tax Digital could cost landlords £1.5 billion

Landlords face losing £1.5 billion in business revenue in the first year of Making Tax Digital (MTD).

Respondents to a new survey said that fulfilling the new tax requirements would take up the equivalent of six full working days during the next 12 months.

Also, up to a third of landlords expect to have to use their time off to meet their Making Tax Digital obligations.

The research revealed that 32% believed they could not fulfil the new tax obligations whilst at work, although 44% felt they could.

The findings come at a time when landlords, as well as sole traders, remain confused about MTD.

Most think that four submissions are required every year, not the five which include four quarterly reports and one for the total year. Some even thought that eight submissions were necessary.

Despite reminders from HMRC and reports in the media, people remain as confused as they did when the first MTD deadlines were introduced.

It is a worrying time for HMRC, as figures suggest that of the 864,000 qualifying taxpayers who are required to comply with the new Making Tax Digital rules, over 500,000 have yet to sign up.

HMRC’s Director for Making Tax Digital, Craig Ogilvie, recently revealed that there have been just 336,000 sign-ups for MTD.

The first major MTD deadline comes on Friday 7th August, when those with a qualifying income over £50,000 will have to submit quarterly reports on their earnings and expenses digitally.

They will have to use third-party software or bridging software to submit their figures.

Experts fear the situation could worsen as the net widens in April 2027 and April 2028 when the qualifying bands for MTD drop to £30,000 and £20,000 respectively.

HMRC hopes that more reminder letters will encourage those who qualify to sign up for MTD.

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