Making Tax Digital for Landlords

Making Tax Digital (MTD) for Income Tax is HMRC’s plan to modernise the UK tax system by requiring landlords and other taxpayers to keep digital records and submit tax data electronically.

Under Making Tax Digital for Income Tax Self Assessment (MTD ITSA), landlords earning over a certain amount must:

• Maintain digital records of rental income and expenses

• Submit quarterly updates to HMRC

• File an annual End-of-Period Statement (EOPS) and Final Declaration

This replaces the traditional Self Assessment tax return system for those within scope.

When Does MTD Start for Landlords?

MTD for Income Tax will apply in stages:

Start Date	Who It Affects
April 2026	Landlords with gross income over £50,000
April 2027	Landlords with gross income over £30,000
April 2028	Landlords with gross income over £20,000

Important: HMRC uses total gross income, not profit, to assess whether you must comply.

💡 If your rental income before expenses is over £50,000, you’ll need to join MTD from April 2026.

What Income Counts Towards the MTD Threshold?

The £50,000 / £30,000 threshold includes:

• Rent from residential or commercial property

• Income from garages, parking spaces, and storage

• Service charges or other related receipts

If you’re also a sole trader, your combined self-employment and rental income is used to assess MTD eligibility.

What Are Landlords Required to Do Under MTD?

If you're within the MTD ITSA threshold, here’s what’s expected:

1. Digital Record-Keeping

You must use MTD-compatible software to keep records of:

• Rental income

• Allowable expenses

• Dates rent was received

• Property details

2. Quarterly Updates to HMRC

You’ll submit a summary of income and expenses every 3 months. These deadlines follow the tax quarters:

• 5 August

• 5 November

• 5 February

• 5 May

🚫 You don’t pay tax quarterly — these are just informational updates.

3. End-of-Period Statement (EOPS)

At the end of the tax year, you’ll review and finalise each property business’s data and claim any reliefs or adjustments.

4. Final Declaration

This replaces your Self Assessment return and combines all sources of income — property, self-employment, dividends, etc.

The deadline remains 31 January after the end of the tax year.

What Software Can Landlords Use for MTD?

HMRC requires you to use approved MTD ITSA software. Some popular choices include:

Software	Mobile App	MTD Features
FreeAgent	✅	Full MTD ITSA integration
Xero	✅	Ideal for landlords with businesses
QuickBooks	✅	Popular with property portfolios
Hammock	✅	Built for landlords
TaxCalc	❌	Agent-friendly, great for tax pros

What If You Use an Accountant?

You can still use an accountant to manage MTD submissions — but you must still keep digital records. Most landlords will either:

• Share access to their MTD software with their accountant

• Use an agent-only tool (some software is built specifically for accountants to manage MTD clients)

Even if you outsource, the responsibility for compliance remains with you.

What Happens If You Don’t Comply?

HMRC will implement a points-based penalty system for late submissions:

• 1 point per missed submission

• Penalties apply when points reach a threshold

• Fines also apply for late payments

📢 Don’t wait for the letter — get ahead of MTD requirements now to avoid stress and penalties later.

Final Checklist for Landlords

✅ Know your gross income

✅ Choose MTD-compatible software

✅ Start keeping digital records

✅ Prepare for quarterly submissions

✅ Speak to an accountant or advisor if needed

Final Thoughts

MTD for landlords is a big change — but one you can prepare for in advance. By switching to digital tools now, you’ll not only stay compliant but gain better control over your property finances.

We’ll continue publishing free guides, checklists, and software reviews to make this transition as simple as possible.