From April 2026, the way some landlords report income to HMRC is changing. Known as Making Tax Digital for Income Tax (MTD), it introduces a more regular, software-based approach to tax reporting.
Rather than relying on a single annual Self Assessment process, eligible landlords will need to keep digital records and submit updates throughout the year.
This guide provides a high-level overview of what’s changing, who it applies to and what to expect.
What is Making Tax Digital?
Making Tax Digital for Income Tax is HMRC’s new system for landlords and sole traders. If it applies to you, you will need to:
- keep digital records of income and expenses
- use compatible software
- send quarterly updates to HMRC
- submit a final tax return and pay tax by 31 January
The key shift is the move to quarterly reporting, rather than dealing with everything at year end.
For a more detailed breakdown of how the system works, you can refer to HMRC’s guidance on Making Tax Digital.
Who does it apply to?
MTD applies if:
- you are registered for Self Assessment
- you receive income from property, self-employment, or both
- your qualifying income exceeds the threshold
For landlords, qualifying income is based on gross rental income before expenses, not profit. If you’re unsure what counts as qualifying income, HMRC provides a more detailed explanation in its Making Tax Digital guidance.
Making Tax Digital Landlords Deadlines
When does it start?
The rollout is phased as follows:
- £50,000 for the 2024 to 2025 tax year, you will need to use it from 6 April 2026
- £30,000 for the 2025 to 2026 tax year, you will need to use it from 6 April 2027
- £20,000 for the 2026 to 2027 tax year, you will need to use it from 6 April 2028
Your start date is based on the income shown in your previous tax return. You can check your likely start date using HMRC’s official Making Tax Digital timelines.
What changes for landlords?
If MTD applies to you, there are four main changes:
- Software becomes essential
HMRC will not provide software. You will need a compatible system, whether that’s a full accounting platform or software that links to existing spreadsheets. (HMRC provides a list of recognised software options.)
- Digital record keeping
You will need to maintain digital records of income and expenses, including dates, amounts and categories.
- Quarterly updates
You will send summary updates to HMRC every three months. These are not tax returns, but they form part of the reporting process.
- Year-end submission remains
You will still complete a final tax return and pay any tax due by 31 January.
What about multiple properties?
All UK rental properties are treated as one UK property business for reporting purposes. If you jointly own property, you only need to report your share of income and expenses. More complex scenarios, such as jointly let properties or mixed income sources, are covered in more detail within HMRC’s guidance.
What will the first year look like?
For those starting in April 2026, the first year introduces a new cycle of deadlines:
- August 2026 – first quarterly update
- November 2026 – second update
- February 2027 – third update
- May 2027 – fourth update
- January 2028 – final tax return and payment
While HMRC has indicated a softer approach to penalties in the first year, the reporting requirements still apply.
What should landlords do now?
If you think this may apply to you:
- Check your income against the thresholds
- Speak to your accountant to confirm your position
- Review your record-keeping processes and put in place the relevant software
Leaving it too late is likely to make the transition more difficult than it needs to be.
A simple summary
Making Tax Digital is not a new tax, it’s simply a new way of reporting. For landlords above the income thresholds, it means moving to digital records, quarterly updates and software-based submissions from April 2026 onwards. For some, that will be a relatively small adjustment. For others, particularly those used to manual processes, it may require a more fundamental change. Either way, understanding early whether it applies to you is key.
Need help managing your property?
While we don’t provide tax advice, we work closely with landlords across the Cotswolds and understand how important clear, consistent record-keeping is. If you’d like support with the day-to-day management of your property, our team is always happy to help.
