Making Tax Digital: What Landlords Need to Know

24th August 2026

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Landlords

Making Tax Digital (MTD) for Income Tax is a significant change to how landlords report rental income to HMRC. Since April 2026, landlords and sole traders with a qualifying income of more than £50,000 have been required to use MTD.

From April 2027, the qualifying income threshold falls, bringing a considerably larger number of landlords into the system. With further changes coming in 2028.

Understanding the rules now will help you prepare ahead of time and avoid unnecessary disruption when the change applies to you.

What Is Making Tax Digital?

Making Tax Digital for Income Tax is HMRC's new system for reporting income from property and self-employment. Rather than compiling a year's worth of records for an annual Self-Assessment return, landlords within scope are required to:

Send quarterly updates to HMRC
Create and update all digital records of their property income and expenses
Submit their tax return through compatible software after the end of the tax year

This represents a shift from annual record-keeping to a more continuous digital process.

This does not mean you need to complete four full tax returns each year. Each quarterly update is a software-generated summary of income and expenses to date.

Tax and accounting adjustments, including allowances, reliefs and other income continue to be handled at the year-end return, by the usual 31 January deadline.

Will You Be Affected, And When?

MTD for income tax will be introduced in phases, based on qualifying income.

Effective Date	Qualifying Income Threshold
6th April 2026	Over £50,000
6th April 2027	Over £30,000
6th April 2028	Over £20,000

An important distinction is that qualifying income is based on gross income, not profit. It is the total income received from property and self-employment before expenses are deducted.

For example, a landlord receiving £35,000 in annual rent may, after mortgage interest restrictions, management costs and repairs, retain considerably less than that figure as profit. For MTD purposes, however, it is the £35,000 gross figure that determines whether the threshold has been met.

Property and self-employment income are also considered together, not in isolation.

A landlord with £22,000 in qualifying property income and £15,000 in self-employment income would have a combined qualifying income of £37,000 — bringing them within scope from April 2027, even though neither figure alone reaches that threshold.

Employment income taxed under PAYE is excluded from this calculation entirely.

How Does Quarterly Reporting Work?

For landlords using standard tax-year reporting periods, quarterly update deadlines fall on 7 August, 7 November, 7 February and 7 May.

Each update is cumulative, covering the period from the start of the tax year to the end of the relevant reporting period, rather than reporting each three-month period in isolation.

This means that if a correction is required, it can be applied in a subsequent update, with the revised figures carried forward automatically — there is no need to resubmit earlier quarters.

Does This Change How Often Tax Is Paid?

No. MTD changes how income and expenses are recorded and reported to HMRC, but it does not alter the existing Self-Assessment payment timetable.

What it does provide is a more regular, up-to-date view of a landlord’s financial position throughout the year, rather than a single annual reconciliation.

What Is The Role Of My Letting Agent?

While tax calculations and filing remain the responsibility of a landlord and their accountant, we will play a useful supporting role by ensuring the information landlords need is readily accessible.

This may include rent received, management charges, maintenance costs and landlord statements — all of which can support the record-keeping MTD requires.

If your accountant has previously received a single annual summary of your finances, MTD will likely require a change in approach, with accurate information needed on an ongoing basis.

Speaking to your letting agent about how your statements are provided can help ensure this transition is straightforward.

Practical Steps for Landlords

Confirm where your qualifying income sits relative to the thresholds above, including any combined property and self-employment income.
Remember that qualifying income is based on gross income, not profit.
If you are approaching a threshold, speak to your accountant in good time before it applies.
Check that you can easily access your rent and landlord statements.
Review HMRC's official Making Tax Digital guidance and the list of compatible software

Making Tax Digital May Affect Your Tenants Too

MTD may also be relevant during tenant referencing. Self-employed tenants and guarantors have traditionally provided different forms of income evidence to those in salaried employment.

As MTD changes how some self-employed individuals report income to HMRC, this may affect the documentation requested during referencing — including, where applicable, a final declaration rather than an interim quarterly submission.

In Summary

Making Tax Digital for Income Tax is being phased in according to qualifying income, with the threshold falling to £30,000 from April 2027 and £20,000 from April 2028.

For landlords, this means moving from annual to ongoing digital record-keeping and quarterly reporting to HMRC.

Qualifying income is assessed on a gross basis and may combine property and self-employment income, so it is worth reviewing your position well before any relevant threshold takes effect.

Landlords do not need to become tax experts, but understanding these changes and knowing where to access accurate financial information when needed, will help ensure a smooth transition as MTD is rolled out.

For Any Questions Or Concerns

Our expert Property Managers are trained on all the latest legislation as well as any confirmed, upcoming changes and they strive to make being a landlord as stress-free as possible.

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