The first quarterly update under Making Tax Digital for Income Tax was due on 7 August. If you sent one, you already know which part was the problem. HMRC wanted your property income and your expenses as separate figures. One payment landed in your bank account.
Most of the coverage made this sound worse than it is. Below £90,000 of property turnover, you can choose to categorise in less detail, and since MTD only starts at £50,000, most of this first intake sits in that band.
But less detail isn't no detail. You still have to record whether each transaction is income or an expense, and whether any expense is a restricted finance cost, which for almost every landlord means mortgage interest.
So the minimum is three numbers, not one. One is what an agent sends, already merged - and 63% of landlords with five or more properties use an agent (English Private Landlord Survey, 2024).
Why one figure is harder to take apart than it looks
Taking those numbers apart is my business, so I've read more letting agent statements than anyone should. What surprises people is how little standardisation there is - not the layout, not the wording, not even which figures get printed. Five problems recur, and each one corrupts a total, which is what you have to report even under the lighter option.
Rent due is not rent received. Arrears and unpaid tenant invoices sit next to real receipts, under headings like "rent to be collected". Cash basis has been the default for most property businesses since 2017-18, so arrears aren't income until the money turns up. Total the column, and you'll pay tax on rent nobody has paid you.
Gross rent frequently isn't printed anywhere. You get the rent lines, the deductions and the payout. The figure your income total wants, everything collected on your behalf before the agent took anything out, often isn't there at all. It has to be built from the parts.
Money you put in isn't income. When a repair costs more than the month's rent, you top the agent up, and that lands on the statement as money in. Every agent calls it something different: a landlord receipt, contributions from owner, "credit - gas safety check" under an income heading. Count it as rent, and your income is overstated while the payout still comes out right. The arithmetic won't warn you.
One line is often several invoices. A row reading "maintenance £480" can have three attached behind it. The row is what was deducted; the invoices only explain it. Enter both, and you've claimed £960 against £480 of work.
"Closing balance" means opposite things at different agents. At one it's the amount about to be paid to you. At another it's what's left afterwards, usually zero. Some never print the payout as a line at all; it appears only in a footer.
What to do about it
At a minimum, you need three figures: rent, expenses and mortgage interest. The interest will never be on an agent's statement, because your agent doesn't pay your mortgage. Get that from your lender.
Keep the statement, not just the bank credit. HMRC's guidance is specific: where an agent collects your rent, it counts as received when the agent receives it, not when they pass it on, and you're responsible for those amounts and dates being right. Your bank shows a net figure on the day it cleared. Wrong number, wrong date.
Ask your agent what else they can send. A spreadsheet export, or a year-end summary - some produce these already and never mention it. One email, and the cheapest fix there is.
Then check it adds up. However you split the payout, by hand or with an accountant or software, the pieces should add back to the statement's own total. If they don't, something has been dropped or counted twice, better found in November than the following January.
One update is behind you. The question before 7 November is where its numbers came from: off the statement, or out of an estimate.
If that turns up something you got wrong in August, it matters less than it feels. Quarterly updates are cumulative, each one covering from the start of the tax year rather than just the previous three months, so November's figures supersede August's. In HMRC's words, you can correct your records without having to resend previous updates. There are no penalties for missing a quarterly update deadline in 2026-27 either, though that grace is about timing, not accuracy.
After November come 7 February and 7 May, and the return for 2026-27 by 31 January 2028.
If you're not in yet, you will be. April 2027 brings in everyone with qualifying income over £30,000, and April 2028 everyone over £20,000. Qualifying income is measured before expenses, taken from your last return, so it's gross rent that counts, not the money reaching your account. A landlord who sees £44,000 arrive can still be over the £50,000 line.
Agents will get better at this. A statement that exports cleanly will be a selling point within a year or two. Until then it's the landlord's problem, four times a year.
