Landlords will have to fork out an extra £460 to use the new Making Tax Digital for Income Tax Self-Assessment system.

The government has admitted that its plans to bring bookkeeping online using approved software – designed to save time and money - will cost the self-employed £110 each per year, including the cost of software subscriptions and the additional hours spent updating their records every quarter.

On top of this, those earning between £30,000 and £50,000 will have to pay a one-off £350 “transitional cost”.

Landlords in the £50,000+ threshold would have to pay a transitional cost of £285 and an annual additional cost of £115.

Challenges

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, says Sam Reynolds, CEO of Zero Deposit (pictured).

He believes the additional cost, red tape, and ‘time drain’ of the new initiative will be seen by many as a bitter pill to swallow given the string of legislative changes they’ve already had to stomach in recent years.

“It will only serve in making the sector even less attractive to current and prospective landlords,” Reynolds adds.

“What we’re keen to hear more of is incentives for landlords to invest in the sector and increase the volume of available rental properties; both antidotes to the current low levels of stock and unsustainably high rental values.”

‍