More than a quarter of a million landlords will need to comply with Making Tax Digital from 6 April, HMRC has confirmed – almost double the figure cited in initial announcements.
A clarification issued by the tax authority reveals that 259,000 landlords are affected by MTD for Income Tax from next month, compared to the 125,000 real estate sector figure originally quoted.
Why the numbers differ
HMRC’s initial release focused on those whose primary sector is real estate. The 125,000 figure breaks down as:
- 118,000 whose only qualifying income is from property rental
- 4,000 sole traders working in real estate such as estate agents and letting agents
- 3,000 with both self-employment in real estate and property income
However, landlords who also have self-employment income in other sectors – such as construction or professional services – appear in those sector categories rather than real estate in HMRC’s statistics. When counting all people with property income affected by MTD regardless of their primary sector, the total rises to 259,000.
Three weeks to prepare
With MTD going live on 6 April, affected landlords must use compatible software to keep digital records and submit quarterly updates to HMRC. First-year penalties have been waived for late submissions, but the requirement to maintain digital records begins immediately.
This follows Residential Landlord’s report on the MTD penalty points system, which confirmed HMRC will waive first-year fines as landlords adjust to the new requirements.
Opinion
The jump from 125,000 to 259,000 is significant – it means many landlords may not have recognised themselves in the original announcement. If you have property income above £50,000 and haven’t yet looked at MTD software, you have less than three weeks. The first-year penalty relief buys time for late quarterly submissions, but the digital record-keeping requirement starts on day one. Not being aware is not the same as not being affected.
