Letting agents and their landlords have been given a further 12 months to comply with HMRC’s contentious Making Tax Digital (MTD) regulation that were due to come in at the beginning of 2023.
Now, landlords who fill in self-assessment forms with a business or personal income over £10,000 a year in a tax year will have until to conform instead.
The regulations, which are designed to streamline the tax self-assessment process and make tax bills more accurate, will eventually also see landlords having to make declaration every three months rather than yearly.
This will mean that landlords, and the letting agents who fully manage properties on their behalf, will have a much high admin burden once MTD does go live.
HMRC says it has made the decision following feedback from property portfolio landlord and other business operators and their representatives about the additional challenges caused by the pandemic
Forming part of the government’s ambition to become one of the most digitally advanced tax authorities in the world, MTD is the first phase of HMRC’s move towards a ‘modern, digital tax service fit for the 21st century’.
The new rules will also require landlords to store details of their affairs digitally and file their tax returns using specialist software on a more regular basis.
Lucy Frazer MP, Financial Secretary to the Treasury (pictured), says: “We recognise that, as we emerge from the pandemic, it’s critical that everyone has enough time to prepare for the change, which is why we’re giving people an extra year to do so.”