Making Tax Digital for Landlords: Who's In, When, and What Changes

Making Tax Digital for Income Tax started on 6 April 2026. For the landlords it covers, the once-a-year scramble in January has been replaced by four short updates to HMRC through the year, sent from software rather than typed into a form.

The change is less dramatic than it sounds. You are not paying tax quarterly, and you are not filing four tax returns. But the records have to exist, in digital form, as the year goes along — which is exactly the habit most landlords have been meaning to build anyway.

Who is in, and from when

Whether you are in depends on your qualifying income, and it is phased in by threshold:

The measurement year is the one that catches people. Whether you had to join in April 2026 was decided by the figures on a return you filed back in January 2026. Whether you join in April 2027 will be decided by the return you file in January 2027 — for a tax year that has already ended.

Qualifying income is gross, not profit

This is the single most misunderstood part of the rules. Qualifying income is your gross income from property and self-employment, added together, before any expenses.

• Rent counts in full. A property bringing in £1,500 a month is £18,000 of qualifying income, even if the mortgage interest, repairs and agent's fees leave very little profit.
• Self-employment income is added to it. A landlord with £22,000 of rent and £30,000 of turnover from a side business has £52,000 of qualifying income.
• Employment income, pensions, dividends and savings interest do not count. A salaried employee with £25,000 of rent is measured on the £25,000, not their total income.
• Jointly owned property counts at your share. A couple jointly owning a portfolio with £34,000 of rent are each measured on £17,000 — below the 2027 threshold, though not the 2028 one.

Limited companies are not in Making Tax Digital for Income Tax. A company that owns property files corporation tax returns as before. If you are weighing incorporation, the limited company guide covers the real trade-offs — MTD should not be the deciding factor on its own.

What actually changes

Four quarterly updates

Each quarter you send HMRC a summary of your income and expenses by category. Not every transaction — totals, from records you kept digitally. The standard quarters and deadlines are:

You can elect to use calendar quarters instead (ending 30 June, 30 September and so on), which some people find easier to line up with bank statements. The deadlines are the same.

If you joined in April 2026, your first update was due on 7 August. The next is 7 November 2026.

A final declaration after the year ends

The quarterly updates do not replace the year-end reckoning. After the tax year closes you make adjustments — accruals, anything that only becomes clear at year end, allowances and reliefs — and submit a final declaration by 31 January, the same date as the old self assessment return. For those income sources, it takes the return's place.

What does not change

• When you pay. Tax is still due on 31 January and, if you make payments on account, 31 July. The quarterly updates are information, not bills.
• What is taxable and what is allowable. The same expenses are deductible as before. The expenses guide still applies line for line.
• Mortgage interest. Still restricted to a basic-rate tax credit rather than deducted as an expense. See mortgage interest and your tax bill.

Software, spreadsheets, and bridging

The updates must be sent from software HMRC recognises as compatible. There are two routes:

1. All-in-one software that holds your records and submits them.
2. A spreadsheet plus bridging software. You keep the records in a spreadsheet; the bridging software reads the totals and sends them to HMRC.

Spreadsheets are explicitly allowed, provided the link between your records and the submission is digital. What you cannot do is keep records on paper, add them up by hand, and type the totals into a submission screen. The chain has to be unbroken.

If an accountant or agent files for you, they will normally use their own software. You still have to keep the digital records they submit from.

The records you need to keep digitally

For each property business — UK property is one business, overseas property another — you need, digitally:

• The date of each transaction
• The amount
• The category it falls into (rent, repairs, finance costs, insurance and so on)

Receipts do not all have to be scanned, though keeping them together makes year-end far easier. What has to be digital is the record of each transaction. If you already follow the approach in landlord record keeping — rent and expenses logged per property, with a category on every line — you are most of the way there already.

Penalties

Late quarterly updates are handled by a points system. Each late update earns a penalty point. For quarterly obligations, reaching four points triggers a £200 penalty, and each further late update while you are at the threshold triggers another. Points expire after a period of compliance.

Late payment of tax is penalised separately, as it always has been. Check the current figures on gov.uk rather than relying on a summary — the rules for this regime are still new.

Exemptions

A small number of people are exempt, mainly those for whom using digital tools is not reasonably practical because of age, disability, location or similar reasons. Exemption is not automatic: you apply to HMRC and they decide. Being unfamiliar with software is not, on its own, grounds for exemption.

A quarter, in practice

For a landlord whose records are already kept properly, a quarterly update looks like this:

1. Check every rent payment for the quarter is logged against the right property.
2. Check every expense is logged, with a category, and that nothing personal has crept in.
3. Reconcile against the bank statement — do the totals agree?
4. Send the category totals through your software or bridging tool.

Twenty minutes, four times a year. For a landlord whose records live in a carrier bag, it is the old January problem, four times a year. The tax return records guide covers the habits that make the difference.

Frequently asked questions

My rent is under £20,000. Do I need to do anything?

Not under the current timetable, unless you also have self-employment income that takes you over the threshold. You continue to file a normal self assessment return. Keep an eye on the threshold if you add a property.

My income fell below the threshold. Can I leave?

If your qualifying income stays below the relevant threshold for three consecutive tax years, you can leave. One quiet year is not enough.

I have one property I let and I am a higher-rate taxpayer through my salary. Am I in?

Only if the rent itself, plus any self-employment turnover, exceeds the threshold. Your salary is not part of qualifying income.

Do I have to use calendar quarters or tax quarters?

Tax quarters by default. You can elect for calendar quarters in your software. Pick one and stay with it.

Can I join voluntarily before I have to?

Yes. Some landlords do so to get the routine settled while the stakes are low.

Does the Rental Property Tracker submit to HMRC?

No. It is a spreadsheet: it holds the digital records — rent and expenses per property, dated and categorised — that the quarterly updates are built from. Submitting them needs compatible software or bridging software, or your accountant's system.

What to do this week

• Find your qualifying income on your last return: gross rent plus any self-employment turnover.
• Compare it with the table above to work out which April applies to you.
• If you are already in, put 7 November, 7 February and 7 May in your calendar.
• Get the records into a digital form now, whatever software you end up using.

The records come first

Every piece of Making Tax Digital assumes the same thing: that your rent and expenses are already recorded, per property, with a date and a category. Software can submit a record. It cannot invent one.

The Rental Property Tracker keeps rent, expenses and dates per property in one file, with a category on every line, so each quarter's totals are already added up. Up to twenty properties, $27 once.

General information for UK landlords, not tax advice. Making Tax Digital for Income Tax is new and HMRC guidance is still being updated; check the current rules on gov.uk or with an accountant before acting. Last reviewed September 2026.