Making Tax Digital: What Letting Agents & Property Managers Must Do

From April 2026, the UK government requires many landlords and property managers to adopt Making Tax Digital for Income Tax Self Assessment (MTD for ITSA). If your clients—whether landlords or letting businesses—have combined property and/or business income above £50,000, you must comply. This threshold drops to £30,000 in April 2027, and £20,000 in April 2028

As a letting agent or property manager, your role now includes ensuring your clients adhere to these evolving regulations.

Essential Guide to Navigate MTD

1. Determine Client Eligibility & Timeline

Assess qualifying income: Total annual income from lettings and self-employment must be checked against thresholds based on their latest Self Assessment return
Know the phase-in dates:
- £50,000+ income → MTD from 6 April 2026
- £30,000+ → April 2027
- £20,000+ → April 2028
Check eligibility tool: Clients can confirm requirements via GOV.UK tools.

2. Sign Up for MTD via Approved Software

Select HMRC-approved software: Choose tools capable of handling digital record keeping, quarterly updates, and final declarations
Agent registration: If clients use an agent, ensure you have an Agent Services Account and proper authorisations
Client sign-up: Clients can sign themselves up via software or HMRC. Agents may sign up for them with permission.

3. Maintain Ongoing Digital Records

Track income and expenses: All property-related transactions—rent, repairs, agent fees, mortgage interest—must be recorded digitally from the start date.
Include all rental sources: UK and foreign lettings, furnished holiday lets, service charges—all must be included in qualifying income and reporting
Use structured record-keeping: Software should allow categorisation by property and expense type.

4. Submit Quarterly Updates to HMRC

Frequency: Mandated submissions are due every quarter—typically in August, November, February, and May • followed by a final annual declaration
Content: Updates include cumulative rental income and allowable expenses; the final declaration includes other income sources, reliefs, and allowances
Automation helps: Use software to schedule updates and send reminders to clients.

5. File Annual Declaration & Pay Tax

Final declaration deadline: Must be filed via MTD software and tax paid by 31 January following the end of the tax year
Adjust tax liability: Include reliefs, allowances, and other taxable income at this stage.

6. Manage Exemptions & Edge Cases

Threshold exemptions: Those with qualifying income ≤ £20,000 are currently exempt
Special categories: Limited companies and REIT income are not covered. Partnerships and capital gains follow different rules
Digital exclusion: Agents and digital exclusions may apply for exemptions.

7. Prepare Clients & Your Practice

Proactive communication: Notify clients of upcoming deadlines and eligibility.
Training: Familiarise clients and staff with MTD processes and software tools.
Test and trial: HMRC encourages early voluntary signups and testing
Maintain documentation: Keep digital copies of receipts, bills, and certificates linked to records.

How AxiaSoft Supports MTD Compliance

AxiaSoft’s PMX Property Management Software is built to simplify your transition to MTD:

MTD-ready accounting: Automated digital record tracking for all income & expenses.
Quarterly reporting: Generate and submit MTD-compliant updates directly to HMRC.
Final submission module: Handle year-end declarations and payments in one system.
Client portals: Share records and reports with landlords for transparency.
Document management: Store receipts, service charge breakdowns, and financial proof.
Training & support: Expert guidance on using PMX for MTD efficiency.

Summary

ACTION STEPS	WHAT YOU NEED TO DO
Check thresholds	Confirm client income eligibility
Choose software	Use HMRC‑approved MTD tools
Sign up	Register client or agent via software
Digital record keeping	Start logging income/expenses now
Quarterly updates	Submit 4 required filings annually
Annual declaration	Finalise tax and pay by January
Support clients	Offer training and reminders

Stay Ahead of MTD with AxiaSoft

Ready to streamline MTD compliance and offer clients a seamless digital tax journey?

AxiaSoft’s PMX software gives you everything you need:

Digital bookkeeping
Quarterly & annual submissions
Client portals and transparency
Full support and onboarding

Contact AxiaSoft today to schedule a demo and see how PMX can transform your tax processes and property management efficiency.

Essential Guide to Navigate MTD

1. Determine Client Eligibility & Timeline

2. Sign Up for MTD via Approved Software

3. Maintain Ongoing Digital Records

4. Submit Quarterly Updates to HMRC

5. File Annual Declaration & Pay Tax

6. Manage Exemptions & Edge Cases

7. Prepare Clients & Your Practice

How AxiaSoft Supports MTD Compliance

Summary

ACTION STEPS

WHAT YOU NEED TO DO

Check thresholds

Confirm client income eligibility

Choose software

Use HMRC‑approved MTD tools

Sign up

Register client or agent via software

Digital record keeping

Start logging income/expenses now

Quarterly updates

Submit 4 required filings annually

Annual declaration

Finalise tax and pay by January

Support clients

Offer training and reminders

Stay Ahead of MTD with AxiaSoft

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