Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.

Accountants Warn of Misconceptions Ahead of Making Tax Digital Deadline

Accountants have raised concerns about widespread misconceptions regarding the requirements for Making Tax Digital for Income Tax, with the first quarterly submission deadline set for 7th August. Many taxpayers, including landlords and letting agents, are reportedly unclear about what is needed under the new digital tax regime.

According to The Negotiator, the first Making Tax Digital for Income Tax quarterly submission deadline covers the period from 6th April to 5th July 2026, or 1st April to 30th June for those using calendar quarters. The new rules require affected taxpayers to keep digital records and submit quarterly updates to HMRC using compatible software, moving away from traditional annual self-assessment reporting.

Making Tax Digital became mandatory from 6th April this year for landlords and sole traders with qualifying income above £50,000. The threshold will be reduced to £30,000 from April 2027 and to £20,000 from April 2028, which will bring almost all landlords within the scope of the scheme.

Accountants have noted that some people mistakenly believe the rules do not apply to them, or that they can submit placeholder updates and resolve their tax affairs at year-end. Others are under the impression that tax payments will be required every quarter.

HMRC will not issue late-submission penalties for missed quarterly updates during the first year of Making Tax Digital. However, from the 2027/28 tax year, repeated missed deadlines could result in £200 penalties under a new points-based regime.

The Negotiator also highlights that wider changes, such as the Renters’ Rights Bill, may affect landlords, making it even more important to maintain accurate, real-time digital records of income, expenses, and cash flow.