Using profit instead of gross income

One of the biggest mistakes is checking your rental profit against the MTD threshold.

MTD uses your gross qualifying income before expenses.

For example, £55,000 of rental income with £20,000 of expenses still means £55,000 of qualifying income for this purpose — not £35,000.

Forgetting other self-employed income

If you are both a landlord and self-employed, the two sources of qualifying income are generally considered together.

For example, £25,000 of property income plus £30,000 of self-employment income gives you £55,000 of qualifying income.

Using the full income from a jointly owned property

If you jointly own a property, you generally consider your share of the property income, rather than automatically counting all the rent received from the property.

Assuming every property cost is deductible

Recording a payment digitally does not automatically make it an allowable expense.

Repairs, improvements and finance costs can have different tax treatments, so it is important to categorise property costs correctly.

Waiting until the quarterly deadline

MTD is designed around keeping digital records throughout the year.

Recording rent and expenses regularly is much easier than trying to reconstruct three months of transactions just before an update is due.