MTD Call to Letting Agents

Making Tax Digital: Why Letting Agents Should Be Planning Now

Making Tax Digital (MTD) for Income Tax is often discussed as a landlord issue.

In reality, it will place operational pressure on letting agents too.

From April 2026, landlords with gross rental income above £50,000 must submit quarterly digital updates to HMRC. The threshold reduces to £30,000 in 2027 and £20,000 in 2028.

Over time, a significant proportion of managed landlords will fall within scope.

The Hidden Administrative Burden for Agents

Under MTD, landlords must maintain digital records and submit quarterly summaries of income and expenses.

For landlords who use letting agents, this raises an immediate issue:

Most only receive periodic PDF statements and receive net figures into their bank account.

At a minimum, this means landlords (or their accountants) will need monthly statements to stay on top of quarterly reporting obligations, all of which will need to be re-keyed and re-typed into software or an excel spreadsheet. Whilst a PDF may be electronic, it is not digital data.

Unprepared agents will find themselves dealing with an increase volume of landlord queries, and risk appearing to be either unprepared or uninterested, with inevitable frustration of all sides.

Without a structured solution, MTD risks becoming an administrative drag and a strain on agent–landlord relationships.

Conversely, agents who can say they are working on a solution(s) will strengthen trust and position themselves as proactive and forward-thinking.

The Minimum Requirement: Regular Digital Statements

In the early stages of MTD, a practical solution may simply involve:

• Monthly digital statements in excel or other digital formats rather than PDFs

• Secure sharing of data with advisers

  
  

At Sedgwick White, we can operate the required MTD software and process submissions on behalf of landlords, provided data is supplied regularly and in a usable format. We just need to find ways to avoid manual re-keying data.

Manual handling creates inefficiency, costs and increases risk of error.

The Real Opportunity: Digital Integration

The longer-term opportunity is far more interesting.

If letting agent systems can:

• Provide structured digital exports

• Allow secure read-only access

• Or integrate directly with compliant accounting software

then the entire MTD process can become automated. As tax agents we could simply log in and download what we need for batch MTD submissions across numerous landlords simultaneously.

No re-keying of data. No manual reconciliation of statements. No duplication of work.

Instead:

• Economies of Scale

• Rental data flows securely

• Quarterly submissions are generated efficiently

• Errors are reduced

• Time is saved

• Costs can decrease

That is digital transformation — not just compliance.

Agents Should Be Asking Software Providers the Right Questions

Now is the time for agents to consider:

• Does our software allow structured digital exports suitable for MTD?

• Can we provide gross rental breakdowns easily?

• Is there API capability for integration with accounting platforms?

• What is our roadmap for MTD compatibility?

Software providers will respond to demand.

If agents begin asking these questions proactively, it encourages development that benefits:

• Agents

• Landlords

• Accountants

• And ultimately the efficiency of the entire process

This is not simply about tax. It is about data infrastructure.

A Collaborative Approach

At Sedgwick White, we aim to highlight the opportunity and help drive change. The obvious and most logical solution appears to be full integration. This would be the dawn of a new approach within the accounting and lettings industry seamlessly completing MTD returns in tandem with no manual data processing. If this is a panacea then it is only a matter of time and willing before it incomes to fruition.

• Removes the need for landlords to learn new software

• Reduces friction between landlords and agents

• Maintains professional tax oversight

• Moves towards digital integration

  
  

In the early stages, this may involve pilot schemes.

In the medium to long term, the aim is full integration — allowing data to move securely and efficiently between agent systems and compliant tax software.

The more aligned agents are with this direction of travel, the smoother the transition will be.

The Bigger Picture

MTD is not simply a regulatory requirement but also an opportunity to modernise processes, strengthen landlord relationships, and position your agency as forward-thinking and professionally aligned.

Agents who prepare early will experience:

• Fewer reactive issues

• Lower administrative strain

• Stronger landlord confidence

• Competitive differentiation

The transition is phased. There is time to plan.

But planning should begin now.

Sedgwick White Limited Chartered Tax Advisers

Working with letting agents to build practical, efficient MTD solutions for landlords.