Esme Ball

For many landlords, reporting to HMRC is traditionally a task that needs attention once a year, but the introduction of MTD brings significant changes and increased regularity that everyone involved in the property rental sector needs to prepare for.  I am pleased to report that, since 2025, and at the invitation of the government, we have been running MTD for six test clients and they have found it less challenging than they anticipated.

The idea of MTD is ultimately to make things more efficient and reduce errors by taxpayers. Our interactions with clients in the property rental market indicate to us that there is still a lot that needs to be done in ensuring the right people are ready for changes at the right times. 

The phased introduction of changes means that they came into effect in April 2026 for sole traders and landlords earning over £50,000 and those earning over £30,000 will follow next April. It’s being described as a “soft landing” for 2026/27 but that will not be the case after April 2027.

Renting out property is often an additional or secondary source of income for landlords and MTD may only apply to their property income – but understanding the full picture is still essential to understanding MTD and, crucially, getting it right. I believe that letting agents have a key role to play here, in giving property owners something of a “heads up” as part of their onboarding process.  

Properties that are rented out are often jointly owned (by spouses, for example) and this can create extra challenges in ensuring that each owner keeps accurate records. Holiday lets are different again and factors such as using agents/third parties, non-resident landlords and succession planning also need to be brought into the frame.

Landlords with larger portfolios may have more to consider so getting good accountancy advice early on can create a vital bridge between what HMRC needs and the day-to-day realities of running a property business.  

There’s a lot to consider but by working together, the accountancy profession, letting agents and landlords can help ensure that starting the conversation early maximises a smooth journey.