Making Tax Digital for landlords: what you need to know

Making Tax Digital for Income Tax (MTD) is the biggest change to how landlords report their income in a generation. Instead of one Self Assessment return a year, landlords who are brought into MTD keep digital records and send HMRC regular updates through compatible software.

Who it applies to

MTD is being introduced in stages, based on your qualifying income. Under HMRC's published timetable:

• From 6 April 2026: qualifying income over £50,000.
• From 6 April 2027: qualifying income over £30,000.
• From 6 April 2028: qualifying income over £20,000.

Qualifying income is your total gross income from property and self-employment before expenses, not your profit. If you own a property jointly, you count your share of the rental income. HMRC uses the figures from an earlier tax return to decide when you join, so it is worth checking your position well ahead of time.

What changes in practice

• Records of rental income and expenses must be kept digitally, in MTD-compatible software.
• A summary update is sent to HMRC each quarter, rather than once a year.
• A final declaration replaces the traditional Self Assessment return, confirming your figures and any other income.
• Late submissions are dealt with under a points-based penalty system.

How to prepare

The landlords who find MTD easiest are those who get organised early. A few practical steps make a real difference:

• Check your qualifying income now, including your share of any jointly owned property.
• Choose software that suits the way you manage your properties, and set up a clear category list for income and costs.
• Use a separate bank account for your rental activity, so transactions are easy to match.
• Agree who will prepare and submit each quarterly update, and diarise the deadlines.