The majority of UK landlords are set to face new digital tax rules by 2028, as HMRC's Making Tax Digital (MTD) regime expands to cover more property owners. The extension, which started with those earning over £50,000 from April this year, will see income thresholds progressively lowered.
From April 2027, the qualifying income threshold for MTD will drop to £30,000, and a year later, in April 2028, it will fall further to £20,000. This means that many landlords who previously submitted annual self-assessment tax returns will need to adapt to maintaining digital records and submitting quarterly updates to HMRC using compatible software.
Propertymark, the industry body for letting agents, has warned of the implications for its members, advising them to discuss the changes with their landlord clients. Agents must decide whether to offer support with the new digital reporting requirements or direct landlords to accountants, bookkeepers, or software providers – a decision that could affect their own systems and HMRC authorisations.
HMRC will contact taxpayers believed to be affected by the changes, but landlords remain responsible for verifying their compliance obligations. While the tax authority has shown leniency towards late-submission penalties in the first year of MTD's implementation, this will tighten from the 2027/28 tax year onwards, with repeated missed deadlines carrying a £200 penalty under a points-based system.
The regulatory changes are part of a broader trend of increasing compliance requirements across the property sector. The transition period is designed to allow landlords and agents time to adapt to the new digital systems and processes. Propertymark has issued guidance and collaborated with HMRC to provide resources, including a webinar, to help its members navigate the evolving landscape.