As landlords, you are used to submitting your tax return for your rental income, but the way you report this to HMRC is changing from April this year. Here at Lawton & Dawe Properties, we want you to be well prepared for these changes.
After years of stalling and uncertainty, the governments Making Tax Digital (MTD) is finally being rolled out to landlords whose income from property meets certain monetary thresholds.
Our landlords who currently have a gross income over £50,000 in the 2024-2025 tax year, will no longer be able to submit a single annual self-assessment as they have done before. Instead, you need to keep digital records using HMRC approved software and submit quarterly updates to HMRC through a compatible system. While a little more frequent we appreciate, the aim of this is to keep HMRC up to date with your income closer to ‘real time’.
The longer-term hope is that there will be less mistakes and this process will generally help you as landlords stay on top of your income and tax throughout the year, so it is less of a panic to gather the required information by the deadline.
By 2027, the threshold will be £30,000 per annum for the digital submission and dropping again to £20,000 in 2028, capturing the information this way for more landlords as the years go by.
We can appreciate change is daunting, and it is different from your usual routine of a January deadline, but, looking at this in a positive light, you are already a step ahead by having Lawton & Dawe as your proactive letting agent.
Here’s how we are already helping;
Accurate records
Lawton & Dawe already track your rent, fees and invoice costs, and provide a monthly statement, this will help with your quarterly submission.
Property Management software
Lawton & Dawe utilise a property management system which can provide digital accurate financial data on your property income, dating back to the beginning of our management if needed.
Fewer missed expenses
Lawton & Dawe record all your expenses from fees to repairs; we help you to not overpay any tax!
Time saving
Instead of chasing invoices or reconciling bank statements every quarter, you as landlords can focus on working with us to ensure your property is giving back what you put in.
Extra support
At Lawton & Dawe we stay on top of compliance for you, ensuring we are sharing the regulatory changes ahead of time, so you can complete your admin accurately and efficiently! Our service is even more valuable as these changes roll out, and as our landlords, you are well prepared!
In the short term, we expect changes to focus on how rental income is reported, rather than immediate tax increases. This means you as landlords may face new processes, more administration, and greater scrutiny.
Longer term, however, we can see there is more scope for rental income to be accurately tracked, which could make future tax rises easier to introduce. Our view is that landlords should plan, keep records in order, and take professional advice early, so you are prepared for how the landscape may evolve.
We would advise you speak to your accountant sooner rather than later, to see what software they recommend, and when they will require information from you.
Also look at your gross rental income to see when you will need to start this new way of reporting, and ensure you are beginning to keep very clear, accurate records.
At Lawton & Dawe properties, as your agent, we are here to fully support you and be on hand for any duplicate statements, invoices of information, just drop us an email or a call to run through what you need!
