The Labour government will require landlords to use the Making Tax Digital (MTD) scheme for income tax self-assessment, with penalties for late payments. The threshold for mandatory compliance will be lowered to £20,000 from April 2028, bringing more landlords under the scheme.

• April 2026: Landlords earning £50,000+ must comply.

• April 2027: Landlords earning £30,000+ must comply.

• April 2028: Landlords earning £20,000+ must comply.

The government claims MTD will modernise tax management and improve efficiency, though landlords have expressed concerns over the lack of compliant software.

Additionally, from April 2025, late payment penalties for VAT and income tax self-assessment will increase, aiming to encourage timely payments. However, the scheme and penalty expansion are projected to cost the government £120 million by 2029.