Why am I being charged Class 2 National Insurance in my 2024/25 Self-Assessment?

Some self-employed taxpayers are mistakenly charged Class 2 NICs due to an HMRC IT issue. If your profits exceed £12,570, you should only pay Class 4 National Insurance, not Class 2. Always check your self-assessment 2024/25 calculation to ensure it is correct.

Do I need to pay Class 2 NICs through Self-Assessment for 2024/25?

No. From 6 April 2024, Class 2 NICs are voluntary for self-employed individuals with profits below £6,725. Voluntary contributions can help build qualifying years for your State Pension, but if your profits are above this threshold, Class 2 should not appear on your self-assessment.

What should I do if my Self-Assessment shows the wrong Class 2 NIC charge?

If you’ve filed your 2024/25 self-assessment and notice an incorrect Class 2 NIC charge, contact HMRC to request a correction. If you haven’t filed yet, consider waiting until HMRC resolves the issue (expected by September 2025).

What happens if I already paid the incorrect Class 2 NICs through Self-Assessment?

HMRC will refund or credit any incorrect Class 2 NIC payments to your self-assessment account once the error is fixed. Keep proof of payment and HMRC correspondence for reference.

When is the deadline for submitting my 2024/25 Self-Assessment?

The online filing and payment deadline for 2024/25 self-assessment is 31 January 2026. The HMRC Class 2 NIC error does not affect this deadline. Submit on time to avoid late filing penalties.

Looking ahead to MTD for landlords

Starting from April 2026, the way many landlords report their income and expenses to HMRC will change under the new regime known as MTD for landlords (via the Making Tax Digital for Income Tax Self Assessment rules).

Landlords within scope will be required to keep digital records, use MTD-compatible software, and submit quarterly updates to HMRC.

This shift introduces new compliance responsibilities and alters the way property owners interact with HMRC’s reporting system.

What is MTD for landlords?

Under the new rules, MTD for landlords refers to the requirement for unincorporated landlords with qualifying income levels to record their rental income and expenses digitally, using HMRC-approved software, and submit summary updates during each tax year rather than relying solely on the annual Self Assessment return.

Once within MTD for landlords, a landlord stays within it even if their income later falls below the threshold—unless their income remains below for three successive tax years.

When does MTD for landlords start?

Start date: 6 April 2026 for higher-income landlords

From 6 April 2026, landlords (as unincorporated entities or sole traders) whose combined property and trading income is £50,000 or more will fall under MTD for landlords.

The threshold is calculated by adding together rental and trading income (excluding corporate rental income).

The income figure is taken from the 2024/25 tax year as reported in the Self Assessment filed by 31 January 2026.

Start date: 6 April 2027 for more landlords

From 6 April 2027, the threshold lowers to £30,000 of combined income for unincorporated landlords, bringing more property owners into the fold of MTD for landlords.

Future extension

The government also intends to bring in landlords with £20,000+ of combined rental/trading income before the next general election, although no firm date has been legislated yet.

What are your obligations under MTD for landlords?

Once captured, MTD for landlords imposes these key obligations:

Digital record-keeping: You’ll need to keep all rental income and allowable expenses in a digital format, using software that is compatible with HMRC.
Quarterly summary submissions: You must send summary updates of income and expenses to HMRC at quarterly intervals (e.g. 5 July, 5 October, 5 January, 5 April—or corresponding calendar quarter dates).
Final declaration: At the end of the tax year, you make a final submission that reconciles all allowances, reliefs, and other non-MTD income (e.g. savings, employment).
Declaration of completeness: You must confirm the information is complete and correct, just as you do now on Self Assessment.

Note: MTD for landlords does not change how you pay income tax. It only changes how and when you report.

Preparing for MTD for landlords

To get ready:

Review your current accounting systems — ensure your software is MTD-compatible or plan migration.
Digitise your records — receipts, invoices, and other documents must be held in digital form.
Run mock quarterly submissions — practise submitting interim summaries before your first legal deadline.
Map your reliefs and allowances — ensure your accounting setup can handle capital allowances, interest deductions, and other allowable costs in the MTD framework.
Monitor income thresholds — keep track of your combined property/trading income so you know when the MTD start date applies to you.

Getting ahead now helps avoid last-minute scrambles and potential noncompliance risks when MTD for landlords becomes compulsory.

What Trueman Brown can do for you

At Trueman Brown, we offer hands-on support to landlords navigating MTD for landlords. Our services include:

Full review and implementation of MTD-compliant accounting systems
Ongoing bookkeeping and digital record maintenance
Quarterly submission handling and reminders
Final declaration preparation and submission
Strategic tax planning to maximise reliefs and ensure compliance

To discuss your situation or get set up with support, please contact us:

Email: mark@truemanbrown.co.uk
Phone: 01708 397262

We’ll work with you step by step to make sure your property business is ready for MTD for landlords, avoiding pitfalls and penalties.

FAQ — MTD for landlords

Q: Who needs to comply with MTD for landlords?
A: Unincorporated landlords (or sole traders) whose combined property and trading income meets or exceeds the relevant threshold (first £50,000 from April 2026, then £30,000 from April 2027).

Q: Do I need to maintain digital records even if I’m not yet in scope?
A: It’s wise to adopt digital record-keeping early. If you later do fall within scope, your records will already be in order for MTD for landlords.

Q: Does MTD for landlords change the way I pay tax?
A: No. The tax payment process remains as now. MTD for landlords changes when and how you report your income, not how you pay.

Q: Can I use spreadsheets for reporting?
A: Yes — provided the spreadsheet software is MTD-compatible (able to submit to HMRC). Many users instead move to commercial accounting software that links directly.

Q: What if my income falls below the threshold after I enter MTD for landlords?
A: You generally remain in the regime unless your income stays below the threshold for three successive tax years.

Q: How soon should I act?
A: As early as possible — ideally several months before your first quarterly submission is due — to give time for system setup, training, and testing.

If you’d like help tailored to your property portfolio or a personalised plan for MTD for landlords, please drop us a line (mark@truemanbrown.co.uk) or call 01708 397262.

MTD for Landlords | Trueman Brown Accountants