HMRC admits MTD will be costly for landlords

MTD for landlords

A couple of weeks ago we wrote about the changes HMRC are making to Making Tax Digital to cover sole traders and landlords. We included some commentary from the Telegraph that explained that rather than saving money as first muted, it looked as though the total amount landlords and business owners will have to pay to join the MTD club is around £196m a year, equating to £110 per business on subscriptions and software in order to comply with HMRC’s digital tax drive. There is also likely to be a one-off transitional cost, approximately £350 for each business as well.

Since then, there has been pressure on HMRC to explain more and in a recent article in AccountancyAge HMRC confirmed that MTD will be costly for landlords.

In the article, Sam Reynolds, CEO of Zero Deposit explains his concerns about the time and cost burden for landlords.

“This may be a bridge too far, especially while the sector is still coming to terms with the financial challenges posed by high interest rates and increased buy-to-let running costs driven by inflation.”

Read the full article here.

From our perspective, there is no doubt there will be a financial burden on landlords and in a period where costs are already high it will be one more unwanted one. It is now even more important for landlords to ensure that their property portfolio is set up in the most cost effective way and more than often not this will be in a limited company.

To find out more about how to set up your property business to ensure it is as tax efficient as possible contact us.

020 8863 4566