Landlords face days of extra work as digital tax rules deepen rental red tape

Landlords are facing a growing administrative burden, with new digital tax reporting rules alone expected to consume up to four working days a year for some property owners, according to research highlighting the mounting complexity of running a rental business.

The findings from property management platform August come two days after the second quarterly deadline under Making Tax Digital (MTD), the Government’s system requiring landlords within scope to keep digital records and submit regular updates to HM Revenue & Customs.

The August Landlord Survey 2026, based on responses from 276 UK landlords in September, found that three-quarters expected each quarterly update to take at least four hours. Some 41 per cent anticipated spending between four and eight hours, while 34 per cent expected to devote more than a day. Just 6 per cent believed the process would take less than an hour.

Across four submissions, that amounts to between 16 and 32 hours annually for most affected landlords, with a third anticipating an even greater commitment.

The paperwork is already changing how property owners run their businesses. Almost two-thirds (65 per cent) have altered their management arrangements over the past two years. More than a quarter have abandoned letting agents to manage properties themselves, while 26 per cent have moved in the opposite direction and 12 per cent have switched agents.

Compliance and legal complexity were the most frequently cited reasons for changing arrangements, mentioned by 27 per cent, ahead of a desire for greater control and dissatisfaction with service.

But outsourcing comes at a price. Among landlords who pay or have paid for management, 58 per cent said fees amounted to at least 11 per cent of rental income, with almost one in 10 paying more than 15 per cent. A landlord with five properties each generating £1,000 a month would pay £7,200 annually at a 12 per cent management rate.

Despite those costs, 69 per cent said they were likely to manage all their properties themselves within two years, including 58 per cent of those currently using an agent.

Legislation was landlords’ biggest concern for the coming year, cited by 26 per cent, ahead of void periods and mortgage rates, both at 19 per cent. Tax was a concern for 13 per cent, while just 2 per cent said nothing particularly worried them.

Richard Samuel, August’s chief executive, said successive Government obligations had created an increasingly demanding compliance workload for small landlords, who often lacked dedicated staff.

He said digital tax reporting was the first requirement for which landlords could quantify the burden, warning that further obligations risked pushing more owners towards self-management, professional agents or leaving the market altogether.