Making Tax Digital for Income Tax: What It Means for UK Landlords

Making Tax Digital (MTD) is the UK government's flagship initiative to modernise the tax system. Designed to make tax administration more efficient, accurate, and easier for taxpayers, MTD will significantly change how landlords report and manage their property income for tax purposes.

In this blog, we’ll break down what MTD for Income Tax Self Assessment (ITSA) means for landlords, when it comes into effect, what you need to do to comply, and how it might affect your day-to-day record keeping.

What Is Making Tax Digital for Income Tax?

MTD for Income Tax is part of HMRC’s broader digital transformation. It will eventually replace the current system of annual Self Assessment tax returns for many taxpayers, including unincorporated landlords. Under MTD, landlords will need to:

• Keep digital records of their income and expenses

• Submit quarterly updates to HMRC using compatible software

• Submit a final declaration at the end of the tax year (instead of a traditional Self Assessment return)

This means tax reporting becomes more frequent, more digital, and potentially more manageable — if you're prepared.

Who Does MTD for Income Tax Apply To?

As of the current guidance:

• MTD for Income Tax will be mandatory from April 2026 for individuals with gross income over £50,000 from self-employment and/or property.

• From April 2027, it will also apply to those with income between £30,000 and £50,000.

Qualifying Year	Threshold	Tax Year used for assessing qualifying income
TY 2026-2027	£50,000	2024/25 return
TY 2027-2028	£30,000	2025/26 return
TY 2028-2029	£20,000	2026/27 return

Specifically for Landlords:

If you earn over the thresholds above solely from property income, you’ll be within the scope of MTD. This includes:

• Rental income from residential property

• Furnished holiday lets

• Commercial property income

• UK or overseas property (note: separate income streams may require separate reporting)

If your gross income from property only is below £30,000, you won’t be required to join MTD — for now.

❗Important: The income threshold refers to gross income (i.e. before expenses), not your profit.

What Will Landlords Need to Do?

1. Keep Digital Records

You’ll need to use MTD-compatible software to keep digital records of all your rental income and allowable expenses. This includes:

• Rent received

• Repairs and maintenance costs

• Agent fees

• Mortgage interest (where allowable)

• Utility bills and council tax (if paid by landlord)

Spreadsheets can still be used if they link to bridging software that enables digital submission to HMRC.

2. Submit Quarterly Updates

Instead of filing one annual return, landlords under MTD will submit updates to HMRC every 3 months. These updates summarise your income and expenses for the quarter. No tax is calculated at this stage — it’s simply to keep HMRC informed in real-time.

Quarterly deadlines are expected to follow this pattern:

Period	Submission Deadline
6 April – 5 July	5 August
6 July – 5 October	5 November
6 October – 5 January	5 February
6 January – 5 April	5 May

3. End-of-Period Statement & Final Declaration

At the end of the tax year, you’ll submit:

• An End of Period Statement (EOPS) confirming the figures and making any accounting adjustments

• A Final Declaration — this replaces the traditional Self Assessment return and includes all other income (e.g. employment, dividends, interest)

You’ll then receive your final tax bill.

How Does This Affect Landlords?

✅ Benefits:

• Improved record keeping: Regular updates encourage landlords to stay on top of finances

• Fewer surprises: Quarterly submissions give a clearer picture of your likely tax bill throughout the year

• Integration: Many MTD-compatible software options help with invoicing, expense tracking, and tax planning

❌ Challenges:

• More frequent reporting: Quarterly updates add admin time

• Software costs: Most MTD-compatible tools are paid services

• Learning curve: If you’re used to spreadsheets or paper records, there’s a period of adjustment

What Should Landlords Do Now?

Even if you don’t fall into the April 2026 mandate, it’s wise to start preparing now:

✅ Check your income: Is your gross property income above £50,000? If so, you’re in the first wave.

✅ Stay informed: MTD is still evolving. Keep an eye on updates.

✅ Consider getting professional advice: Speak to us ensure you are income tax compliant and to ensure your records and systems are MTD-ready.