HMRC rebuilt its losses API in June. Software still on the old version will fail when you send losses for 2026-27.

A changelog few landlords read, with real consequences

We run a small monitor that watches HMRC's Making Tax Digital API specifications for the APIs our live app calls. In early July it flagged that a whole new version of the API that records tax losses, 7.0, had appeared; HMRC's changelog showed it had gone live in Production on 16 June. The version our first integration was built on had, months earlier, been quietly fenced off from the current tax year.

This is the first in an occasional series where we write those changes down. Not because a landlord should have to care about API versions, but because the gap between “HMRC recognised” and “actually keeping up” is hard to see from the outside, and this is a clean example of the difference that could cost you a rejected submission.

What changed, in one paragraph

HMRC released version 7.0 of its Individual Losses (MTD) API to production on 16 June 2026, for tax years 2026-27 onwards. It replaces the two separate resources in version 6.0, brought forward losses and loss claims, with a single group named Losses and Claims and three endpoints: retrieve, create or amend, and delete. Version 6.0 has not been switched off; since 22 January 2026 it simply refuses any tax year after 2025-26. HMRC's developer newsletter of 30 September 2026 says it is scheduled for deprecation on 1 February 2028, with retirement planned for 1 August 2028.

Put plainly: 6.0 is last year's API. It still accepts tax years up to 2025-26. For a 2026-27 return, HMRC says to use 7.0, which has a field for brought forward losses applied in that year. HMRC's documents do not say whether a 2025-26 loss sent through 6.0 reaches the 2026-27 calculation, so check that it appears. So when a landlord comes to send losses for 2026-27, from 6 April 2027, their software has to be speaking 7.0, or the request is rejected before it reaches a human.

Why this matters if you have a property loss

Property losses happen. A year of heavy repairs or a long void can leave your whole property business with allowable expenses and any capital allowances above its rent. All the UK lettings you run outside a partnership count as one business, so one loss-making property creates no loss if the others cover it. Mortgage interest on residential lettings does not count, because it gets a separate basic-rate tax reducer instead, and the capital cost of buying a property does not count either. A loss is carried forward against the next profits of the same business, which lowers the tax you pay then.

Under Making Tax Digital, brought forward losses and loss claims are sent through this API. If your software tries to send 2026-27 loss figures using version 6.0, HMRC answers with RULE_TAX_YEAR_FOR_VERSION_NOT_SUPPORTED and does nothing else. There is no partial credit and no silent fallback. What that costs depends on the loss. HMRC's documents give this endpoint as the software route for a brought forward loss, and we found nothing saying the calculation picks one up another way. Check your calculation before you finalise. If the loss is missing, you could pay more tax than you owe, until it is sent through software that supports version 7.0 and your return is amended (normally by 31 January 2029; after that, any remedy is narrower). A loss made in 2026-27 usually matters when it is set against a later year's profit. The exception is the part of the loss that comes from capital allowances (other than structures and buildings allowance) or from agricultural estate expenses. That part can be claimed against your other income for 2026-27 or 2027-28, up to a cap of £50,000 or, if more, 25% of your adjusted total income. If that claim cannot be sent, your 2026-27 bill could be higher than it needs to be. A rejected submission does not itself remove the relief, but the claim has its own deadline: one year after the 31 January filing date for the year you set it against (31 January 2029 for 2026-27, 31 January 2030 for 2027-28). Overpayment relief does not cover a claim that was never made, so after that date the relief is lost.

So this is not a plumbing detail. It can be the difference between a brought forward loss that reduces your 2026-27 bill and one that does not show up in your calculation because the software was a version behind.

The timeline, dated

Every entry below is from HMRC's published changelog, last checked on 6 November 2026.

The pattern is worth noticing. The version cap landed in January, just under five months before the replacement reached production in June. For anyone reading the changelog, that was just under five months of warning. For a landlord whose software firm was not reading it, the first sign is likely to be a rejected submission from 6 April 2027.

What actually changed in the shape of it

We built our first losses integration against version 6.0, so we can be specific about the size of the change. In 6.0, brought forward losses and loss claims are two separate things, with their own paths and their own operations. Our 6.0 code carried eleven distinct calls to cover them: create, list, retrieve, amend and delete a brought forward loss, and create, list, retrieve, change the type of, delete and reorder a loss claim. Only the five brought forward calls are wired into our app. We tested the six claim endpoints in HMRC's test environment, and no screen uses them.

Version 7.0 folds all of that into one resource, Losses and Claims, with three endpoints: retrieve them, create or amend them, and delete them. Eleven calls become three. That HMRC gave the new group a single combined name, where 6.0 had two, is the clearest signal of the merge; we read the collapse from the naming and the endpoint list, since the two old resources no longer appear separately for 2026-27.

One more detail the changelog carried, for the engineers: 7.0 added an optional header in Sandbox, suspend-temporal-validations, that lets you submit an in-year loss while testing. Without it, an in-year submission returns RULE_TAX_YEAR_NOT_ENDED. It is a testing convenience, marked Sandbox only, and it tells you HMRC still expects losses to settle at year end, not mid-year.

How would you even know?

You probably would not, unless you asked your vendor. We found no announcement aimed at taxpayers; HMRC published it for software firms, in its developer changelog and newsletter. A landlord has little reason to read either, and may not know their software is a version behind until a submission is rejected.

This is the quiet problem with the phrase “HMRC recognised”. We found nothing in HMRC's published guidance that removes a product from its software finder for being late to a new API version. HMRC does publish dates: it says 2026-27 returns should use version 7.0, and it plans to retire 6.0 on 1 August 2028. The losses cap was published in January; the replacement went live in June. A listed product that stopped paying attention in between could still be listed and still fail when it sends losses for 2026-27.

We run the monitor to catch these changes for our own integration. It only watches API specifications, so it did not pick up version 6.0's retirement date, and an earlier version of this post wrongly said no date had been set. We now check HMRC's developer newsletter as well when we re-check this post. LetSort is not HMRC recognised and is not on its software list, so none of this is a reason to prefer it to a listed product. The one question worth asking any Making Tax Digital vendor is narrow and revealing: which versions of the HMRC APIs do you support for 2026-27, and how quickly do you move when they change?

One more thing in the changelog

On 15 June 2026 HMRC added a Retrieve ITSA Penalties endpoint to version 4.0 of the Self Assessment Accounts (MTD) API in Sandbox, and on 15 September 2026 it reached Production. Software can now read a taxpayer's MTD penalty points and penalties directly. For 2026-27 HMRC has said there are no penalties for late quarterly updates, but you still have to send them before you can submit your tax return, and the new late return and late payment penalties apply from the year you join.

Common questions

Sources

This series is built on HMRC's own dated changelog and developer newsletter. We re-read the changelog, the newsletters, the Individual Losses documentation, the penalties guidance, the Property Income Manual page and the legislation below on 6 November 2026.

• HMRC: income-tax-mtd-changelog (the dated entries for 9 and 22 January, 23 March, 15 and 16 June, and 15 September 2026)
• HMRC: MTD for Income Tax software developer newsletter, Edition 7 (version 6.0 scheduled for deprecation on 1 February 2028, retirement planned for 1 August 2028; published 30 September 2026)
• HMRC: MTD for Income Tax software developer newsletter, Edition 6 (version 6.0 retirement date; published 28 August 2026)
• HMRC: Individual Losses (MTD) API (the version list; 7.0 is the current version)
• HMRC: Individual Losses 7.0 (what the brought forward route is for; last updated 7 November 2026)
• HMRC: end-to-end service guide, updates at tax year end (how year-end calculations identify losses, and how claims are made)
• HMRC: Self Assessment Accounts (MTD) API (the Retrieve ITSA Penalties endpoint, added in Sandbox 15 June, Production 15 September 2026)
• GOV.UK: Penalties for Making Tax Digital for Income Tax (no penalties for late quarterly updates in 2026-27, though they are still required before the return; last updated 30 March 2026)
• HMRC press release: 436,000 sole traders and landlords make their tax digital (quarterly updates need to be sent through HMRC-recognised software; 12 August 2026)
• legislation.gov.uk: SI 2026/336, regulation 3 (meaning of functional compatible software)
• HMRC: find software for MTD for Income Tax (the software finder)
• HMRC Property Income Manual: PIM4210 (losses carried forward against profits of the same property business)
• legislation.gov.uk: Income Tax Act 2007, section 118 (carry-forward property loss relief)
• legislation.gov.uk: Income Tax Act 2007, section 119 (the loss is deducted from the next year’s profits of the same business first)
• legislation.gov.uk: Income Tax Act 2007, section 120 (property loss relief against general income, with a capital allowances or agricultural connection)
• legislation.gov.uk: Income Tax Act 2007, section 124 (deadline for a claim against general income)
• legislation.gov.uk: Income Tax Act 2007, sections 123 and 24A (structures and buildings allowance excluded; the £50,000 or 25% cap)
• legislation.gov.uk: ITTOIA 2005, section 264 (UK lettings form one property business)
• legislation.gov.uk: ITTOIA 2005, section 272A (no deduction for the costs of a dwelling-related loan)
• legislation.gov.uk: ITTOIA 2005, section 272B (the restriction covers loans for a dwelling-house)
• legislation.gov.uk: Taxes Management Act 1970, section 9ZA (amending a return, within twelve months of the filing date)
• legislation.gov.uk: Taxes Management Act 1970, Schedule 1AB (overpayment relief, within four years, subject to exclusions)

Related

• What actually happens when your software files an MTD update
• Why your MTD software asks for your device details