Use Sage Sole Trader for UK landlord and sole trader income

How to manage UK landlord and sole trader income in Sage Sole Trader. How to identify and record each income source correctly for Making Tax Digital (MTD) for Income Tax.

HMRC requires a separate quarterly update for each income source. You can't submit UK landlord income and sole trader income together in one update.

In Sage Sole Trader, this means you need a separate business instance for each income source. Use one business for your sole trader income and another for your UK landlord income. You access both under the same login.

Check how many income sources you have

Some situations look like more than one income source but only count as one. Use these examples to check which applies to you.

Income sources	Example
One income source	You own two rental properties outright, for example a house you let long term and a separate holiday let. Both properties have the same ownership split. HMRC treats all UK rental property as one property income source, including former furnished holiday lets. Set up one business instance for both properties.
More than one income source	You run a sole trader business and you also rent out a property. HMRC treats trading income and property income as separate income sources. Set up two business instances: one for your sole trader income and one for your UK landlord income. You own different ownership shares in different properties, for example 50% of one property and 75% of another. Sage Sole Trader uses one ownership share across your whole UK property income source, so it doesn't support this. A specialist landlord product, such as Hammock, is more suitable.

 

Set up your businesses

If you only have one income source, use one Sage Sole Trader instance.

If you have more than one income source:

• Keep one instance on the free plan
• Add the other as a paid business instance

If you already record both income types in one business

Some users record both trading and rental income in one business. To submit your MTD updates correctly:

1. Mark property-related accounts as Not-business in that business.
2. Create a new Sage Sole Trader business for your UK landlord income.
3. Record your property income and expenses in the new business.
4. Set up MTD in the new business.
5. Submit UK landlord quarterly updates from the new business.

If you own property jointly

If you co-own a rental property, each co-owner needs their own subscription. Sage uses the ownership percentage you enter during setup to calculate each owner's share for submission.

If your ownership share differs between properties

Sage Sole Trader uses one ownership share across your whole UK property income source. If you own a different share in each property, Sage Sole Trader doesn't support this.

If you need to record different shares for different properties, a specialist landlord product is more suitable. Hammock is one example.

If you already use another Sage product for VAT

If you keep more than one income source in a Sage Accounting business for VAT purposes, you can continue using that business for VAT.

Use the Non-business category in Sage Sole Trader for any accounts you don't want to report to HMRC for Income Tax.

• Set up a UK property business in Sage Sole Trader
• Manage multiple UK properties in Sage Sole Trader