How can you plan ahead for Making Tax Digital for Income Tax?
Planning ahead is vital for the success of any property business, as this will allow you to grasp opportunities as they arise. Many landlords will have now heard about the upcoming changes to income tax reporting in the form of Making Tax Digital (MTD) for income tax. For many landlords, the thought of an increase in administrative tasks will be daunting, however, this change is coming, and it is a mandatory one.
Some of you may be wondering what changes are brought out by MTD for income tax. MTD is the requirement for eligible individuals to make submissions reporting earnings and expenditure’s every quarter instead of annually, with a fifth submission at the end of each year, requiring a total of five submissions. Another important change is that these submissions must now be completed through software that is compatible with MTD, and digital record-keeping is now a requirement.
As a result, all those who these changes will impact will have a vested interest in learning how this process works and how the additional administrative tasks will impact your business. However, there is good news for landlords, which is that software providers have anticipated these needs ahead of these changes and are oriented towards landlords.
One piece of software we use here at PJCO is Hammock. Hammock has been working closely with HMRC and landlords to understand these changes and allow all users to be ready once MTD is mandatory in 2026. This software allows you to set up and manage your properties, tenancies, and transactions in a user-friendly way. We as accountants can access the data so that they can prepare submissions for you. Hammock will be an option that is available to make submissions for MTD and learning how to use this software will significantly reduce the administrative burden once MTD has been rolled out.
We suggest signing up for the beta and trialling the software in 2025 to mitigate any potential errors or inefficiencies.
If you have any questions about Making Tax Digital, its impacts on you, or you plan for the future, please get in touch with our BTL team here at PJCO –
please feel free to book a free discovery call using the link below!
Please get in touch on 01273 441187 or book a discovery call with one of our expert accountants.
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The word accounting comes from the word accountability. If you are going to be rich, you need to be accountable for your money.
Robert Kiyosaki
