Letting agents are being advised to check whether qualifying landlord clients are using Making Tax Digital for Income Tax (MTD) – or whether agents themselves should manage the process for their clients.
Sole traders and landlords with qualifying income over £50,000 should now be using MTD and near future deadlines in 2027 and 2028 will bring more agents themselves into the process for their own businesses.
MTD requires affected taxpayers to keep digital records and submit quarterly updates to HMRC using compatible software.
Trade body Propertymark is suggesting that letting agents check their clients as they should have been for some two months now.
The first MTD deadline was April 6 2026 from which time landlords and sole traders with a turnover of over £50,000 in the 2024-25 tax year must use the new system.
From April 6 2027, the rules will apply to those with a turnover of over £30,000 in the 2025 to 2026 tax year.
And from April 2028, the rules will apply to those with a turnover of over £20,000 in the 2026 to 2027 tax year.
HMRC will review Self-Assessment tax returns and write to taxpayers who need to use the service.
However, landlords and sole traders remain responsible for checking whether the rules apply to them, even if they do not receive a letter.
Propertymark has set up a dedicated MTD hub to identify deadlines, HMRC links, guidance on compatible software, quarterly update, and signposting for agents who need to set up as agents with HMRC.
Members can also watch a webinar recording with HMRC, which gives a practical overview of what is changing, who will be affected, and how agents can support landlords.
A statement from the trade body says: “Propertymark’s guidance is designed to help agents have informed conversations with clients and avoid a last-minute rush.
“However, Making Tax Digital is a tax reporting requirement; seek advice from a qualified tax professional if you are unsure how the rules apply to you or your clients.
“HMRC also provides videos and webinars for agents, landlords and sole traders. These cover the rules, who is affected and when, practical preparation steps, software choices, client authorisation, signing up to Making Tax Digital, and how to use the system.”
The body says agents should decide whether they will act for landlords and manage their reporting as this will affect onboarding, training, data collection, and how often information is needed from clients.
They should then speak to landlords early to agree what support they will provide.
MTD cannot be completed using paper records or ordinary manual processes. Those eligible for MTD must use compatible software to create, store and correct digital records of income and expenses.
