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.

Letting Agents Advised to Prepare Landlords for Making Tax Digital Changes

Letting agents are being urged by Propertymark to start discussing upcoming tax changes with their landlord clients. Lower income thresholds for HMRC’s Making Tax Digital for Income Tax regime will bring a wider group of landlords into scope over the next two years.

Making Tax Digital became mandatory from 6 April this year for landlords and sole traders with qualifying income above £50,000. The threshold will fall to £30,000 from April 2027 and then to £20,000 from April 2028, which will include almost all landlords.

Affected landlords must keep digital records and submit quarterly updates to HMRC using compatible software, replacing the traditional annual self-assessment process. Propertymark has highlighted that agents will need to decide whether to support landlords with these new reporting requirements or direct them to accountants, bookkeepers, or software providers.

The trade body emphasises the importance of early discussions, as some landlords may expect their agent to assist with the process, while others may seek alternative arrangements. Agents who choose to offer support will need appropriate systems for capturing property income and expenses digitally, as well as the necessary HMRC authorisations.

Propertymark has published guidance for its members, covering key deadlines, HMRC requirements, and software options, and has produced a webinar with HMRC.

Although HMRC will contact taxpayers it believes are affected, landlords remain responsible for checking if the rules apply to them and for ensuring compliance. While there are no late-submission penalties for missed quarterly updates during the first year, repeated missed deadlines from 2027/28 could result in £200 penalties under a new points-based regime.