What You Need to Know: Making Tax Digital for Landlords

🏡 County Durham Landlords: Making Tax Digital and What You Need to Know

Making Tax Digital for landlords across Shotley Bridge, Consett and the surrounding County Durham villages

If you're a landlord in Shotley Bridge, Consett or the wider County Durham area who usually completes a Self Assessment return each year, there's an important change to be aware of.

Making Tax Digital for Income Tax is now relevant for landlords with combined gross income from property and self-employment above £50,000, based on the qualifying income shown on their most recent Self Assessment records.

For those within the current threshold, the process involves keeping digital records, providing quarterly updates throughout the year and completing an end-of-year declaration using compatible software.

If your rental income sits below that threshold, the changes may not apply to you yet, but the threshold is expected to reduce over the next couple of years, eventually reaching £20,000. It's worth understanding where your income currently sits and preparing accordingly.

For landlords who are currently within the threshold, a few practical points are worth noting. 👇

💻 Your records need to be digital

A spreadsheet on its own won't normally be enough. Many landlords will either use compatible bookkeeping software or connect their existing spreadsheets to suitable bridging software.

📅 Quarterly updates aren't full tax returns

Quarterly updates are a summary rather than a full tax calculation, so they're often less daunting than they initially sound.

For anyone getting used to the new process, getting organised early can make managing these updates much simpler.

💷 Check your gross income, not just your profit

The threshold is based on gross qualifying income from property and any self-employment, rather than the profit remaining after expenses.

It's worth checking your total figures rather than assuming you're below the threshold simply because your earnings after costs are modest.

If Making Tax Digital currently applies to you, it's worth checking the relevant quarterly dates and making sure your records are ready ahead of time.

🏢 What if you own property through a limited company?

If you hold property through a limited company, Making Tax Digital for Income Tax does not currently apply in the same way, as this particular system is aimed at individuals and sole traders.

August, with its usual summer lull in viewings and lettings admin, can be a good moment to get your digital record keeping in order before autumn brings a new intake of tenants and a fresh set of receipts to track.

📞 Not sure where you stand?

If you're unsure whether Making Tax Digital applies to you, it's worth having a conversation with your accountant to understand your individual circumstances.

At Harrington Brown, we're always happy to support landlords across Shotley Bridge, Consett and the wider County Durham area with practical, straightforward advice. If you need help finding the right property-savvy professional to speak to, just ask and we'll be happy to point you in the right direction.

👉 Get in touch with Harrington Brown: https://www.harrington-brown.co.uk/contact/