You've probably heard the phrase Making Tax Digital (or MTD) from HMRC lately. If you are renting out residential property, this matters to you - HMRC is changing how landlords need to handle their tax returns.
What's Changing?
No more yearly paper tax returns. Instead, HMRC wants landlords to keep their records on on software and send in updates four times a year. It's a significant shift, but we'll help you step by step.
Think of it as switching from collecting rent in cash to paying it directly into your bank account. It might take some time, but ultimately, it makes life easier.
Here's What You'll Need to Do
If your gross rental income is £50,000 or more a year, from April 2026 and £30,000 from April 2027, you'll need to:
Keep your rental records on HMRC compliant software
Send HMRC quarterly reports every three months
Keeping up throughout the Year
What Our Local Landlords Are Saying
One of our landlords in Pin Green told me he wishes he'd started preparing earlier. He's right - the sooner you get used to the new system, the easier it'll be.
Most clients who've switched to computer-based records say it's more straightforward than their old paper systems. It's like having all your tenancy agreements in one organised folder instead of scattered across different drawers.
Keeping Up Throughout the Year
Instead of the usual January panic with receipts and bank statements, you'll need to keep up with things throughout the year. Many of our Stevenage landlords find this helps them spot potential issues early and makes tax time less stressful.
Just as you wouldn't wait until year-end to check if your tenants had paid their rent, regular tax updates help you control your property finances.
Avoiding Common Problems
We've been helping landlords in Hertfordshire prepare since HMRC first announced these changes. The most common issues are choosing the wrong software or not knowing which records to keep.
This is similar to choosing property management software. You need something that fits your specific needs and is easy to use. Getting it wrong could mean HMRC penalties, which we can help you avoid.
Starting Now Makes Sense
Even though 2026 and 2027 sounds far off, it's worth getting ready now. We have several landlords who have already asked us to help set up their new systems - they wanted plenty of time to get comfortable with the changes.
How We Can Support You?
We know Stevenage, the property tax management, and we've helped dozens of local landlords prepare for MTD. As Xero-certified advisors and AAT Licensed Accountants, we can ensure you're using the right digital tools and following all HMRC's requirements correctly. When you come to see us, we'll look at how you handle your rental accounts now and show you the best way to meet these new requirements.
You'll find us at The Business and Technology Center (BTC) in Stevenage. Call us at 01438 281281 or contact us to arrange a visit to our office. We're always happy to explain these changes over a cup of tea.
Want to know more?
You can contact Hammond-Barr accountants on 01438 281281 or via email at [email protected].
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