Making Tax Digital: Your Questions Answered

A month after Making Tax Digital was introduced for landlords with a property income of more than £50,000, together with our partners, Taxd, we invited you to quiz our expert team at an exclusive member webinar. Here are some of your burning questions when it comes to the new system.

MTD Frequently Asked Questions

Q: What does a landlord have to do on "keeping digital records" if they are using an accountant to do everything for them?

A: Some accountants may be creating those records for you, some may ask for a spreadsheet, some may ask you to complete the quarterly updates and then handle year-end themselves. It will depend on what services you pay for from the accountant.

Q: Do I need to report other income (e.g. interest, dividend income) in MTD quarterly submissions or are these income streams just adjustments at the year end?

A: Income such as interest, PAYE income, dividends, and pensions will only be at year-end, and do not need to be recorded in your quarterly update.

Q: I am a joint landlord with my partner, so do I need to use MTD only if my share/income is more than the threshold? Or do I need to use MTD if total income for both of us is more than these amounts before sharing 50-50 for tax?

A: You will look at your own individual historic tax return when determining whether you are mandated to use MTD. You may wish to look at ways to efficiently split gross income for tax purposes.  

Q: If you forget to add an expense in one quarter, are you able to add this to a later quarter as long as it's within the same tax year?

A: Each quarterly update will include the previous quarter(s) and are reported cumulatively. Any updates that need to be made can be done as the year goes on.

Q: As it stands, I am not meeting the threshold for MTD. I have recently become self-employed and don't know yet if I will meet the threshold for April 2026. How would you advise I proceed?

A: MTD looks at a previous self-assessment tax return. The best way to think of it is that you must always file a traditional self-assessment return before you use MTD. You can find more about when you might be mandated to use MTD on our guide.

Q: Some of my tradespeople prefer to be paid in cash. How am I going to deal with this? I currently have an accountant to do everything. I don’t know how to do spreadsheets or anything digital!

A: Cash transactions can be entered manually into your MTD for Income Tax software. If you believe you are unable to use the required software, you can apply for an exemption from HMRC. HMRC will then determine on a case-by-case basis, but will likely be quite strict when determining your eligibility for exemption.  

Q: Can we see how Portfolio works - can you please show a 'live' how to enter/upload data etc?

A: We have free webinars with an interactive demo of how Portfolio works every Thursday at 1pm. You can register to attend here.

Further support from the NRLA

• Stay compliant with Making Tax Digital using our Portfolio property management software. Your NRLA membership includes access to Portfolio and Open Banking technology to organise, categorise and store your transactions for free ready to comply with MTD. You can also upgrade to automate categorisation, and handle quarterly updates and the final declaration by their respective deadlines.
   
• Get all the information you need about the ins and outs of the new system in our essential guide to MTD.
   
• Find out more about our partner, Taxd, and how they can help you meet the new requirements.