UK landlords are heading towards the introduction of Making Tax Digital with growing unease, as new research suggests confusion remains widespread just months before the system comes into force. A January survey of landlords highlights mounting concern about compliance costs, penalties and the lack of practical guidance from tax authorities.
For buy-to-let investors already grappling with higher mortgage rates, licensing schemes and tighter regulation, the digital tax shift risks becoming yet another administrative burden – one many feel ill-prepared to handle.
Making Tax Digital worries
Exclusive polling carried out in January by August, a rental management platform, found anxiety levels running high across the sector. Among the 305 landlords surveyed, just 12.8% said they were very confident they understand what Making Tax Digital (MTD) will require them to do.
Nearly half of respondents (48.2%) admitted to low confidence overall. Of these, 32.1% said they were not confident at all, while 16.1% described themselves as actively worried or concerned. In total, 87.5% of landlords said they were worried to some degree, including more than a third (35.7%) who said they were very worried.
For many landlords, this uncertainty isn’t abstract. MTD will require digital record-keeping and more frequent reporting to HMRC, increasing both administrative time and professional costs. For smaller landlords in particular, that could mean higher accountancy fees or investing in new software simply to stay compliant.
HMRC guidance and the compliance gap
August says the findings point to a growing implementation risk. While awareness of MTD is rising, many landlords feel the official guidance has failed to translate complex policy into clear, usable steps.
Samuel Cope, founder of August (pictured), has been outspoken on the issue. He argues that landlords are being pushed towards a major compliance change without the level of practical support needed to make it workable on the ground.
“HMRC’s guidance hasn’t been practical or widely accessible enough for the average landlord and it’s showing,” Cope said. “MTD is a seismic change, adding real cost and admin to a sector that already feels overwhelmed.”
He has written to the Treasury and the minister responsible for HMRC, urging a substantial reduction in fines for early non-compliance. His argument is straightforward: penalising landlords who are confused rather than resistant risks pushing more people out of the sector altogether.
This concern is echoed by landlord groups such as the NRLA, which has previously warned that small-scale landlords risk being caught out by technical requirements rather than deliberate tax avoidance.
What landlords need to do next
From an investor’s perspective, the issue is not whether MTD is coming, but how disruptive its introduction will be. With confidence levels still low and the deadline approaching, many landlords are now scrambling to understand software requirements, reporting timetables and potential penalties.
Market observations suggest landlords with simple portfolios may cope, while those with multiple properties, mixed income streams or self-managed accounts face a steeper learning curve. In cash terms, even modest compliance costs can quickly erode net yields, particularly in lower-rent regions.
The survey also hints at a wider problem: policy is moving faster than the sector’s ability to absorb it. As supply in the private rented sector continues to tighten, further friction risks unintended consequences for tenants and landlords alike.
Editor’s view
Making Tax Digital may be sold as modernisation, but the anxiety among landlords suggests a disconnect between policy ambition and practical reality. Without clearer guidance and a softer landing on enforcement, the risk is simple: good landlords get punished for confusion, not avoidance. Is that really the outcome the Treasury wants?
Author: Editorial team – UK landlord & buy-to-let news, policy, and finance
Published: 20 January 2026
Sources: August landlord survey (January 2026); August founder commentary; HMRC Making Tax Digital guidance
Related reading: Making Tax Digital set to force some landlords into 10 HMRC filings
