How Digital Reporting Is Changing Property Taxes

Making Tax Digital (MTD) is changing everything. Here’s what you need to know.

What Is MTD?

Making Tax Digital is the government’s initiative:

• Digital record keeping
• Quarterly reporting
• Online filing

MTD for Property Income

Currently:

• Mandatory for some
• Coming for more
• Deadline approaching

Key Changes

1. Digital Records Required

No more paper:

• Must keep digital records
• Software required
• Spreadsheets no longer qualify

2. Quarterly Reports

Report 4x per year:

• Quarter 1: July-September (due Oct)
• Quarter 2: October-December (due Jan)
• Quarter 3: January-March (due May)
• Quarter 4: April-June (due Aug)

3. Connected Software

Software must:

• Record transactions digitally
• Submit quarterly reports
• Generate annual return

What This Means for You

If You’re Ready

• You’re compliant
• No changes needed
• Continue as normal

If You’re Not Ready

• Upgrade now
• Get compatible software
• Learn the process

Timeline

Now

• Property income MTD active for higher earners

Coming Years

• Lower thresholds
• Wider rollout
• More requirements

How to Prepare

Step 1: Get Software

Choose MTD-compatible software:

• Check HMRC approved list
• Test with real data
• Train your team

Step 2: Change Processes

• Stop using spreadsheets
• Use software for everything
• Set quarterly reminders

Step 3: Test Quarterly

• Submit test reports
• Check it works
• Fix issues

FAQ

Is MTD mandatory?

Currently for higher earners. Expanding.

What if I don’t comply?

Penalties start at £200 and increase.

Can I use an accountant?

Yes, they can submit on your behalf.

Prepare for MTD. It’s only expanding.

Try HMRC Reporter: https://hmrcreporter.com

Related: “The Future of Property Tax Reporting in the UK” covers what’s coming.

Why This Matters

Understanding this topic properly is essential for staying compliant with HMRC and avoiding costly mistakes. The rules around property tax can be complex, but getting them right saves you money and stress.

Key Points to Remember

• Track all income from all sources
• Keep proper records for at least 6 years
• Report accurately on your Self Assessment
• Use professional software when possible

Common Mistakes

Many property managers and landlords make these errors:

• Not tracking all income streams
• Missing deadline dates
• Not keeping proper records
• Claiming wrong expenses

How to Get It Right

1. Use software to track income and expenses automatically
2. Keep records of all transactions for at least 6 years
3. File on time - 31st January deadline
4. Get help if you’re unsure

FAQ

“Do I need to declare this?”

Yes - if it’s income from property, it needs to be declared to HMRC.

“What expenses can I claim?”

Allowable expenses include repairs, insurance, utilities when let, agent fees, and professional costs.

“What happens if I get it wrong?”

HMRC may charge penalties and interest. In serious cases, they may investigate.

Summary

This area of tax is important for all property managers and landlords. Stay informed, stay compliant, and consider professional software to help.

Simplify your HMRC reporting. HMRC Reporter connects to platforms, tracks all your property income, and generates accurate reports - saving you time and reducing errors.

Try HMRC Reporter today