MTD for landlords masterclass

Recorded on 27th October 2022

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will mean some major changes for landlords. Watch this partner-exclusive masterclass for top tips on preparing your practice and landlord clients ahead of the introduction of the initiative in April 2024.

FreeAgent’s Darren Kelly and Tony Stevenson FCA, and Wright Vigar's Nick Heawood-Ferriter cover:

  • the latest MTD for ITSA news and developments from HMRC
  • practical tips on how to prepare your landlord clients for MTD
  • an overview of FreeAgent's future plans for MTD for ITSA

Highlights from the Q&A

The chat box was very busy during the webinar. Here we’ve collected the key questions you asked, along with our answers.

When should we start getting clients to use FreeAgent for Landlords?

You can start adding landlord clients to your dashboard now. The earlier you can do this the better, in order to get you and your clients used to the software ahead of the deadline.

If a client has four properties on one FreeAgent for Landlords licence, will four separate submissions be needed each quarter?

No, each quarterly submission will contain details for all four properties on the licence.

Is there a strict limit of five properties within FreeAgent for Landlords?

It’s technically possible to add more than this, but we’ve designed the software for landlords with up to five properties, so the experience will be optimal for that group.

If I have a client with qualifying income from both self-employment and property, will they need two separate FreeAgent accounts to make MTD for ITSA submissions?

Yes, this client would need two FreeAgent licences - a sole trader licence for their self-employment income and a FreeAgent for Landlords licence for their property income - as the quarterly updates for each revenue stream will need to be reported to HMRC separately. Only the final declaration is done as a joint submission.

I have a client who has a sole trader licence but needs access to FreeAgent for Landlords instead. Can I transfer them from one to the other?

There currently isn’t a way to transfer client data directly from one licence to another. And bear in mind that if they have two income streams - from a sole trade and from property - they would need two licences.

Is there anywhere in the software to post information pertaining to Capital Gains Tax, i.e purchase price and costs?

We’re currently exploring how we could record Capital Gains Tax information in FreeAgent for Landlords.

Does FreeAgent for Landlords include payroll functionality?

No, and there are currently no plans to add this to FreeAgent for Landlords. MTD for ITSA will initially apply to unincorporated landlords, who would not require payroll functionality.

How does FreeAgent for Landlords work for clients with joint property ownership?

We are working on split ownership functionality that will be live soon.

Can FreeAgent for Landlords handle properties with multiple occupancy?

Yes.

Is it possible to record both rental income and fees if my client has a letting agent who pays them net rent with expenses deducted?

Yes, you can edit the relevant transaction in FreeAgent so that it shows the gross income, and then split this transaction to record both the net rental income and the letting agent’s fee.

Is it possible to post expenses that apply to multiple properties? Is there a way to split these expenses or would I need to enter separate transactions?

You can split the relevant transaction in the usual way and assign each part to a different property in FreeAgent for Landlords.

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