HMRC has revised its MTD IT update notice and published a new MTD IT digital record keeping notice. Some of the material has been moved between the notices to make it clearer.  

Some significant changes have been made, including the following: 

• References to furnished holiday lettings have been removed as they are no longer relevant.
• Two relaxations relating to the reporting of income from jointly owned property are now included. These previously announced changes allow joint property owners to:
• report income (gross) from jointly held properties in their quarterly update while leaving reporting of expenses until the year end finalisation process; and
• create a single digital record for each category of income from jointly held properties and a single digital record for each category of expense from jointly held properties. This removes the need for each joint property owner to create digital records of each transaction.
• It has been confirmed that taxpayers using three-line accounting for income from property must record and report residential property finance costs (such as mortgage interest) as a separate expense.

Caroline Miskin, Senior Technical Manager - Digital Taxation, ICAEW Tax Faculty, said: “The minor relaxations that apply to the reporting of income from joint property are welcome, but we are still a long way from practical solutions for joint property owners. The number of software products that are truly designed with income from property in mind is still limited”. 

“By omission from the notices, the current relaxation that allows joint property owners to report net income on the self assessment return when that is all the information they receive is not being replicated in MTD IT. This is disappointing and ICAEW has asked HMRC for reassurance that the relaxation will continue to apply to self assessment.” 

See ICAEW’s MTD hub for guidance on MTD IT.