First there was Section 24, then there was MEES, then came the RRB and now, to make matters worse, the latest set of initials to annoy the landlord fraternity, MTD, looms ahead like a big, black billowing storm cloud.
Making Tax Digital comes into effect in April next year and will, initially, affect all landlords who earn more than £50,000 from property. They’ll need specialist software to send Quarterly updates to HMRC plus a yearly tax return – logging receipts, so the tax man says, ‘little and often.’
Why is this happening?
HMRC says: “It’s part of the government’s goal to modernise the tax system and close the tax gap – the difference between what tax should be paid and what people actually pay.”
Simple as that…only you guys that commented on an HMRC advice story in Landlord Today didn’t think it was that straightforward.
Carole Aldread told us: “HMRC should make the right software available to all being a landlord is stressful enough without HMRC adding to it. My accountant is suggesting doing it by spreadsheet then posting every quarter as requested.”
Driving out smaller landlords
But AJR pointed out: “Despite unconvincing reassurances from HMRC, we can be sure MTD won’t be remotely easy, and hassle free. More stress and aggro to contend with!”
Jo Westlake said she has been preparing for this since 2023.
“I’ve been trying out various software for the last 2 years and it’s been a steep learning curve.
“I was somewhat disappointed when I tried the HMRC software finder tool and it said there wasn’t a single product that would work in my situation and I would have to use 2 or more different softwares.
“My situation is fairly standard. I have rental income, PAYE income, interest and dividends and contribute to a SIPP. All totally standard stuff. It’s pretty rubbish that no one has produced a software that will cope with such a standard combination of reportable financial activities.”
Margaret Venn told us straight: “Not looking forward to it. It is another means of driving out smaller landlords.”
No-one was moved to disagree with her. Perhaps because they secretly suspect she is right.
Whether it’s tax laws, compliance rules or local authority license regulation, landlords feel massively under red tape bombardment – and failure to obey the rules now comes with some pretty stiff penalties – with more to come.
Responding to a story about two landlords who were fined £100,000 after unlawfully breaking planning laws when they converted a family home into flats, D Duck was outraged: “100k ! Fines on landlords are just getting out of control. There’s no wonder why people are leaving the sector.
“I don’t own any flats or HMO’s, just nice 2 and 3 bed houses let to families and these days I’m getting to the point where I just want to sell all of them.
“Maybe I should start a company that sells tents and develop a camp site. It’s going to be the only option left for a lot of tenants.”
Guilty as charged
And that’s the nub of the problem, right there. Too many landlords feeling got at; too many property investors seeing their profits squeezed out of existence by rising costs, unfair taxation and stiffer non-compliance penalties.
Regular contributor, Annoyed Landlord, summed it up in dramatic style.
“Judge: You are here today charged with the offence of being a landlord. How do you plead? Landlord: Guilty!”
And this observation from Henry S: “The Government’s mistrust of landlords is greater than its wish to provide homes for homeless tenants in Temp Accom.
“Their Bill will prevent landlords re-letting for 12 months if an ex-rental doesn’t sell as planned. The House of Lords said it should be ‘only’ 6 months. So that’s 6 months of rented housing gone; purely because Labour don’t trust landlords.
“And after re-letting following the 12 months empty property (where the insurance will insist on a recorded visit each week and give reduced cover anyway): 200% Council Tax will be due from day 1 the second time a landlord sells. No rental income, and double council tax for as long as a sale takes: -not in our hands unless we sell at auction or to a property cash buying company, both for likely below market value.”
Being used as scapegoats
And does this manifest itself as far as political sentiment goes?
This, rather distressing analysis is from Pat Gan.
“We have gone from a country where people had stable jobs, paid holidays, quality of life and work life balance to a country where both partners need to work, having children late or not having children at all, not having enough working age people, then complaining there are too many migrant workers.
“We will end up knowing someone or being related to someone homeless in the next 25 years.
“The working class literally have nothing anymore and the middle classes will be next. It’s already happening – Landlords are being used as scapegoats to move the housing to corporate companies.
“People will sleep-walk until it is in your face. Most landlords in here complaining about what is happening. The anti-landlord changes started from2014/2015. Now in 2025 landlords see the true reality. Such is life.”
Until next time,
N
Nat Daniels is chief executive of Angels Media, publishers of Landlord Today and the other ‘Today’ property trade titles.
