Notice

Making Tax Digital for Income Tax: digital record-keeping notice

Published 17 January 2025

The provisions in this notice that relate to jointly let property should be read in conjunction with the related provisions in the Making Tax Digital for Income Tax update notice.

Relevant persons with jointly let property can make use of either easement independently (and where they choose to report only income, not expenses, they are an ‘eligible person’ in this notice).

This notice is made further to regulation 6 of The Income Tax (Digital Requirements) Regulations 2021 as amended. The paragraph on retail sales is made under regulation 6(3).

1. A relevant person with property income and profits from a jointly let property which are chargeable to income tax under Part 3 of ITTOIA 2005 (property income)

An eligible person:

• in relation only to their share of income that arises from properties they let jointly, can create one digital record (a single entry) for each category (as set out in sections 3.1 and 3.2 of the Making Tax Digital for Income Tax update notice) of property income that was received during a quarterly update period
• in relation only to their share of expenses that arise from properties they let jointly can create one digital record (a single entry) for each category (as set out in sections 2.1 and 2.2 of the Making Tax Digital for Income Tax update notice) of property expense that was incurred during a tax year

This notice does not apply to a joint property owner who decides not to create digital records as set out above.

2. Turnover below the VAT registration threshold

A relevant person with an annual turnover from either self-employment or property that is below the VAT registration threshold, may choose to categorise their digital records of income and expenses in less detail.

For each relevant source of income, they can categorise digital records as either income or an expense, instead of using the more detailed categories listed in the Making Tax Digital for Income Tax update notice. This will mean they send figures for total income and total expenses, for each relevant income source, in their update information.

A relevant person that lets property jointly and meets the criteria above can also choose to categorise their records in this way.

Where a relevant person receives property income and incurs residential property finance costs (such as mortgage interest), they must create a separate digital record for these costs and send them separately from other expenses, in their update information.

More information is available about the restriction on finance cost relief for individual landlords.

3. Retail sales

A relevant person may choose in respect of each tax year that the digital records in relation to the retail sales of that business are those specified in this section.

In respect of the retail sales of the business of a retailer, digital records mean a single digital record of the daily gross takings for any retail sales made.

The gross daily retail sales digital record must include:

• all payments as they are received by the relevant person or on the relevant person’s behalf, from its own cash-paying retail consumers — this includes payments by cheque, debit or credit card, maestro, visa or similar electronic transactions and electronic cash
• the full value of all credit or other non-cash retail sales received by the relevant person or on the relevant person’s behalf — this includes the full value of credit sales, the cash value of payment in kind for retail sales, the face value of gift, book and record vouchers received and any other payments for retail sales, including those sales completed via third-party online sales platforms

The following should be excluded when calculating the amount of daily gross takings:

• counterfeit notes
• illegible credit card transactions
• inadvertent acceptance of foreign currency (where discovered after their acceptance)
• inadvertent acceptance of out-of-date coupons which are not honoured by promoters
• instalments in respect of credit sales
• refunds to a consumer for overcharges or faulty or unsuitable goods
• float discrepancies
• unsigned or dishonoured cheques from cash customers
• use of training tills
• void transactions
• any other income that is not included in the gross daily retail sales digital record

Guidance is available on keeping digital records and submitting quarterly updates as part of Making Tax Digital for Income Tax.