Making Tax Digital for UK Property Landlords: ITSA Filing Explained

If you own property in the UK or abroad, HMRC has a filing requirement that affects you: Making Tax Digital for Income Tax Self Assessment (ITSA). This post explains what ITSA means, who must comply, and how to avoid the double-entry trap that catches many landlords juggling spreadsheets and separate tools.

What HMRC ITSA Means for Landlords with UK or Foreign Property

Making Tax Digital for Income Tax Self Assessment is HMRC's move towards real-time tax filing. Instead of keeping records on paper or in a spreadsheet and submitting one return at the end of the tax year, you'll file quarterly updates throughout the year and a final declaration before 31 January.

ITSA doesn't require fancy software or an accountant. You need HMRC MTD Recognised software - software that HMRC has checked and listed. BizHub365 is one such system (product ID AN9C2Y), designed to let you record rent, expenses, and mortgage interest, then push those figures straight into your ITSA return.

Who Must File Digitally Under MTD for Income Tax Self Assessment

You must file digitally if:

• You own UK property and receive rental income above the threshold.
• You own foreign property and receive rental income above the threshold (reported in GBP equivalent).

If your income is below the threshold, ITSA is optional. Many landlords choose to file anyway because digital filing is quicker and less error-prone than manual tax returns.

One common question: "Do I have to use software?" Not if you're below the threshold and not electing to file digitally. But if you must file - or want to - you need HMRC MTD Recognised software.

UK Property versus Foreign Property: How HMRC Splits Them

HMRC treats UK property and foreign property as separate streams of income for ITSA purposes. This matters because:

• UK Property: Rental income from houses, flats, or rooms you let in the UK. You record repairs, agent fees, insurance, council tax, and other costs.

• Foreign Property: Rental income from property abroad (in EUR, USD, JPY, etc., converted to GBP). You claim the same expenses, but HMRC requires you to file a separate summary for foreign property income and gains.

In BizHub365, you can set up two property portfolios: one for UK rental, one for foreign rental. Each feeds into its own ITSA summary, but both pull from the same invoicing and expense record. No copying figures between spreadsheets.

Where the Figures Come From: Rent, Mortgage Interest, Repairs, Agent Fees

Your ITSA return starts with the money in and money out:

• Rental income: Rent paid by tenants, including deposits you keep for damage or unpaid rent.
• Mortgage interest: The interest part of your mortgage payment (not the capital repayment).
• Repairs and maintenance: Fixing a broken boiler, repainting, replacing a tap - genuine repairs that restore the property to working order.
• Agent fees: If you pay a letting agent to find tenants or collect rent.
• Insurance: Buildings and contents insurance.
• Council tax or rates: If you pay it (some landlords pass this to the tenant).
• Utilities: If you pay for water, gas, or electricity as part of the tenancy.
• Legal and professional fees: Costs of letting, eviction, or accounting advice.

Many landlords use a mix of tools: a booking app for tenant payments, an invoicing tool for agent fees, a spreadsheet for expenses, and a separate payroll system if they employ a property manager. Each tool keeps its own records, and figures don't talk to each other.

Here's the problem: when tax time arrives, you manually copy figures from the invoicing tool into a spreadsheet, then into your tax return. Each copy is a chance to make a mistake.

Why Using the Same System for Invoices and ITSA Saves Double-Entry

If your invoicing, expense tracking, and tax return are in one place, you enter each figure once. BizHub365 records:

• Rent invoices (from you to tenants).
• Tenant payments (linked to invoices).
• Expenses (agent fees, repairs, insurance, utilities).
• Bank imports and smart matching (so you don't miss a transaction).

When you file ITSA, the return draws figures from the same records. No re-entry. No copy-paste errors. No "which spreadsheet is the current one?"

This also means you can file quarterly updates with confidence. Each update takes a snapshot of income and expenses since the last update. By January, your final declaration is just summing the four quarters you've already filed.

How BizHub365 Pulls Property Income and Expenses from Your Books into ITSA Returns

Here's how it works in practice:

1. Record income and expenses as you go (or import them from your bank).
2. Tag or categorise each transaction: rent, mortgage interest, repair, agent fee, insurance.
3. Run the property summary for the period you're filing (a quarter or the full year).
4. Review the figures in BizHub365's ITSA return builder.
5. File with HMRC using the HMRC login credentials linked to your tax account.

BizHub365 handles the currency conversion for foreign property (all figures in GBP), splits UK and foreign property, and calculates net profit and loss. It doesn't calculate tax or claim reliefs on your behalf - that's your accountant's job or your own - but it presents the figures in the format HMRC expects.

Step-by-Step: Quarterly Updates and the Final Declaration

The ITSA filing year runs from 6 April to 5 April (the same as the tax year).

Quarterly updates: Each quarter, you submit an update that says, "Here's the income and expenses for the last quarter." HMRC doesn't calculate tax yet. You're just telling them what happened.

Final declaration: By 31 January after the tax year ends, you file a final declaration that says, "Here's the total, including any reliefs, and here's the tax I owe." This is where you claim mortgage interest relief, losses carried forward, or capital allowances.

In BizHub365, you can generate quarterly summaries on demand, review them, and file when ready. The system keeps a record of what you filed and when, so you won't accidentally re-file the same quarter.

Common Landlord Questions: Can I Still Use an Accountant? Do I Need Separate Software?

Can I still use an accountant?

Yes. An accountant can file ITSA on your behalf if you've given them permission (via HMRC's agent authorisation). But you'll still need to provide them with accurate figures from your books. Using BizHub365 means you can hand over a printed report showing income and expenses by category - no spreadsheets, no guesswork.

Do I need separate software?

No. Some landlords use an invoicing tool, an expense tracker, and a separate ITSA app. Each one charges its own fee and adds another login to remember. BizHub365 is one system: invoices, expenses, bank import, and ITSA filing all in one place. One monthly fee (£29), one login, unlimited team members (so a co-landlord or property manager can see the records without paying extra).

What if I have multiple properties?

BizHub365 lets you categorise properties by name or code. When you run the ITSA summary, you filter by property to see income and expenses for each one. You can also group them (e.g. all UK rental into one ITSA summary, all foreign rental into another) or file separately if HMRC requires it.

Conclusion: One Subscription for Invoicing, Expenses, and ITSA Filing - No Per-Landlord Fees

Making Tax Digital for property landlords sounds complex, but it's really just a shift from "file once a year" to "file quarterly updates and a final declaration." The figures you need are the same: rent in, expenses out, net profit.

The smart move is to use software that already has your invoicing and expenses, so you're not re-entering data in a separate tax app. BizHub365 is HMRC MTD Recognised (product ID AN9C2Y) for UK and foreign property. One subscription per business covers unlimited users - no per-user fees - and it includes invoicing, expenses, bank import, and ITSA filing for both UK and foreign property.

Start your free 14-day trial and see how figures from your invoices and expenses flow into your ITSA return. Cancel before the trial ends and you pay nothing.

Generated by TTT AI.