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Further Changes to Making Tax Digital For Landlords

In his Autumn Statement the Chancellor Jeremy Hunt, confirmed that Making Tax Digital for income tax self-assessment will not be extended to those with gross income under £30,000, for now. For any landlords with one or two properties this means that they will probably fall under this threshold and continue to file self-assessment tax returns for the foreseeable future. 

Further changes affecting landlords were also announced.

End-of-Year Reporting Changes

A further change that will have a big impact on reporting under MTD ITSA, is the removal of the requirement for taxpayers to file an End of Period Statement (EOPS).

Under the original MTD ITSA proposals, year-end reporting would have involved two separate steps: 

1. An EOPS reporting the taxable profit/loss of each trade or property business
2. A Final Declaration pulls together EOPS data, other sources of income, allowances and reliefs etc. to calculate the final tax position.

It has long been argued that a separation of the current, single year-end process into two distinct steps could have caused a great deal of confusion amongst taxpayers (especially the unrepresented). It is therefore a big relief that HMRC has indicated that the EOPS will no longer be a separate requirement, and will instead be built into the Final Declaration process. However, not enough details have been given yet so we will report further when this is updated by HMRC. We ourselves are developing our own in house software for landlords that is built to comply with MTD making the reporting a simple easy process. Further details will be sent in the new year.

Changes to Quarterly Updates

There was another sigh of relief to welcome changes to make quarterly updates cumulative. This should facilitate easier amendments, with taxpayers able to simply correct any errors in their next quarterly update, rather than resubmitting past quarters. Again, this is something we, professional bodies, and other stakeholders have been requesting for some time.

Jointly owned property

Further, welcome changes were made to landlords with jointly owned property. HMRC now propose to allow landlords with jointly owned property to opt out of quarterly updates and keep simpler records in respect of jointly owned property.

This should simplify record keeping and reporting, and reduce the need for joint property owners to share records multiple times a year. However, it does mean that any in-year tax estimates joint landlords receive under MTD are likely to be even more inaccurate than usual. HMRC will be announcing further details which we eagerly anticipate. The full details of the proposals can be found here:-

Making Tax Digital Small Business Review: outcome – GOV.UK (www.gov.uk)

If you have any further queries on this subject please reach out to us at 01902 711370 or email enquiries@uklandlordtax.co.uk if you have any questions or require our expert assistance.

Thandi Nicholls Ltd
Creative Industries Centre
Glaisher Drive
Wolverhampton
West Midlands
WV10 9TG