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When a landlord receives a lease premium, the tax treatment depends on the lease duration. For leases of 50 years or less, part of the premium is considered income, while leases longer than 50 years are treated as capital receipts.

The accruals basis for landlords records income when earned and expenses when incurred, offering a more accurate financial picture, especially for businesses with complex transactions or receipts over £150,000. It involves adjustments like apportioning rent and managing prepayments to align with the correct tax year.

As MTD for ITSA takes effect from April 2026, landlords must adapt to quarterly digital reporting. This guide breaks down the process, showing how to calculate taxes, track income and expenses, and meet HMRC requirements using MTD-compatible software. The transition offers improved cash flow visibility and simplifies year-end tax calculations.

With the April 2026 deadline for Making Tax Digital (MTD), landlords earning over £50,000 must switch from annual Self Assessment to quarterly digital reporting. Adopting MTD-compatible software, understanding income thresholds, and meeting new reporting schedules is essential to ensure compliance and avoid penalties.

As the 2026 MTD deadline nears, landlords and sole traders earning over £50,000 must transition to digital record-keeping. HMRC’s strict requirements for "digital links" and quarterly updates make choosing the right software crucial. Set up a robust system now to simplify tax compliance and avoid costly mistakes.

Property income encompasses all receipts from exploiting rights over UK land and property. It includes rental income from furnished and unfurnished properties, receipts from bare land, and payments in kind. Landlords can deduct allowable business expenses, but capital expenditure is not deductible when calculating taxable profits.