Making Tax Digital for Landlords: What It Means, Who It Applies To, and Key Deadlines
Posted on Thursday, 30 April, 2026
The UK tax system is undergoing one of its biggest changes in decades, with Making Tax Digital (MTD) transforming how landlords report income to HM Revenue & Customs.
If you own rental property, this isn’t something to ignore—MTD will fundamentally change how and when you report your rental income. Here’s a clear, practical guide for landlords.
What Is Making Tax Digital?
Making Tax Digital (MTD) is a government initiative designed to make tax reporting more accurate and efficient by requiring individuals and businesses to:
- Keep digital records of income and expenses
- Submit quarterly updates to HMRC
- File a final end-of-year declaration
Instead of one annual Self Assessment return, landlords will effectively report four times a year, plus a final confirmation.
Who Does MTD Apply To?
MTD for Income Tax (often called MTD for ITSA) applies to individual landlords and sole traders, based on their total gross income (not profit).
From April 2026
You must comply if:
- Your total income exceeds £50,000 per year
- This includes combined income from:
- Rental properties
- Self-employment
From April 2027
- Threshold reduces to £30,000
Expected Future Changes
- Likely to drop further to £20,000, although this has not yet been formally confirmed
👉 Important: This applies to total income before expenses, not your profit.
Who Is Exempt?
You may be exempt if:
- You are digitally excluded (e.g. due to age, disability, or lack of internet access)
- You operate through a limited company (companies fall under different rules)
What Landlords Will Need to Do
1. Keep Digital Records
You’ll need to record:
- Rental income
- Expenses (repairs, management fees, insurance, etc.)
This must be done using MTD-compatible software (spreadsheets alone won’t be enough unless linked to bridging software).
2. Submit Quarterly Updates
You’ll send updates to HMRC every 3 months, summarising:
- Income received
- Expenses incurred
Typical quarters will look like:
- April–June
- July–September
- October–December
- January–March
3. Submit a Final Declaration
At the end of the tax year, you’ll confirm:
- Any adjustments
- Other income (if applicable)
- Final tax position
This replaces your current Self Assessment submission.
Key Deadlines Landlords Need to Know
| Date | What Happens |
|---|---|
| April 2026 | MTD starts for income over £50,000 |
| April 2027 | Threshold drops to £30,000 |
| Future (TBC) | Possible extension to £20,000 |
What This Means in Practice
For many landlords, this is a significant shift:
- ❌ No more once-a-year tax return
- ✔️ Ongoing bookkeeping throughout the year
- ✔️ More admin—but fewer surprises at year end
Those already using accounting software will find the transition much easier.
What Landlords Should Do Now
1. Check Your Income Level
Work out if your rental income (plus any self-employed income) exceeds:
- £50,000 (for 2026)
- £30,000 (for 2027)
2. Speak to Your Accountant
If you have one, they should:
- Confirm whether MTD applies to you
- Recommend suitable software
- Help set up your reporting process
3. Move to Digital Record Keeping Early
Don’t wait until the deadline—start now:
- Use software like Xero, QuickBooks, or FreeAgent
- Track income and expenses monthly
4. Get Organised
- Keep invoices and receipts digitally
- Separate personal and rental finances
- Review your processes before MTD becomes mandatory
How Lakin & Co Can Help
At Lakin & Co, we work closely with landlords to ensure they stay compliant with evolving regulations.
While we don’t provide tax advice, we can:
- Help you organise your rental income records
- Provide clear statements to support your reporting
- Work alongside your accountant to streamline the process
Final Thoughts
Making Tax Digital isn’t just another admin task—it’s a fundamental change in how landlords manage their finances.
The key is simple:
👉 Get prepared early, go digital, and avoid a last-minute rush – we would strongly recommend you speak to your accountant or seek tax advice on this.
If you’re unsure how this affects your portfolio, feel free to get in touch—we’re here to help guide you through the changes.
Please note: This is not tax advice and should be used as guidance only – you shuld speak to a qualified accountant for advice.
