Making Tax Digital pushed back following pressure from NRLA
The government and HMRC had initially proposed that all landlords with a gross rental income above £10k would need to be using the programme by 2024
The Government has announced it will push back the implementation date for the next stage of its Making Tax Digital (MTD) programme, following pressure from the National Residential Landlords Association (NRLA).
In response to the NRLA’s pushback, the government has now revised both, with new compliance dates of 2026 for those with incomes over £50k and 2027 for those with more than £30k.
It is reported that the MTD programme would have brought income tax self-assessment into scope and also increased the income threshold landlords must meet before they need to enrol with the new system.
MTD, which is a plan by the government and HMRC to fully digitalise UK tax, had initially proposed that all landlords with a gross rental income above £10k would need to be using the programme by 2024.
This would mean that landlords, and similarly qualifying self-employed workers, would need to keep tax records and submit returns to HMRC digitally through new MTD-compatible software.
However, the NRLA argued that the £10k threshold was too low and would force smaller landlords with reliable, paper-based accounting systems to comply with systems they did not need and were not set up to use. The association instead suggested that the income threshold be increased to £50k.
In addition, the association also warned against implementing MTD before the software and associated systems “were ready”, so landlords had time to prepare and familiarise themselves with the new processes.
Chris Norris, policy and campaigns director at NRLA policy and campaigns director, said: “The announcement increases the threshold and pushes back implementation dates, the two things we specifically called for.
“We are pleased that the government has listened to what we and others in our industry have to say. This is a sensible move that will give landlords the time they need to prepare for the changes, increasing chances of a smooth transition once Making Tax Digital goes live.”