Want to avoid MTD penalties?
Making Tax Digital for Landlords is coming into effect from April 2026, changing how landlords earning over £50,000 a year report their tax. The scheme requires digital record-keeping and quarterly updates to HMRC.
This guide explains who is affected and the timeline you need to know. With the right accounting services, landlords can stay compliant and manage the transition smoothly.
Stay compliant with HMRC's new Making Tax Digital rules
What is Making Tax Digital for Landlords?
Making Tax Digital (MTD) is HMRC’s plan to move tax admin fully online. If you’re used to submitting one Self Assessment a year, that’s changing. Under MTD, landlords and other self-employed individuals will need to report income and expenses more regularly using approved software.
Here’s the timeline:
- From April 2026: MTD applies if your total gross income (from rent, self-employment or both) is over £50,000.
- From April 2027: The threshold drops to £30,000.
That income is before expenses. It includes your total rent and/or business income combined. For example, if you make £40,000 from renting out property and £15,000 freelancing, your qualifying income is £55,000. That puts you into MTD from April 2026.
Own property jointly? You only count your share of the income. So if your half is under the threshold, you may not be caught by the rules—yet.
What landlords need to do under Making Tax Digital (MTD) rules
Once you’re in the MTD system, here’s what changes.
1. Keep digital records
You’ll need MTD-compatible software to track your rental income and expenses. Spreadsheets alone won’t cut it anymore unless they’re hooked up to “bridging software” that links to HMRC.
Plenty of HMRC-approved tools are out there. Some are free, but if you want something more tailored, landlord-specific apps like Landlord Studio or cloud platforms like Xero, (which is what we use, by the way!) can make life easier.
2. Submit updates every quarter
No more once-a-year tax returns. Instead, you’ll send HMRC a summary of your income and expenses four times a year. It’s not a full return—just a snapshot of how your property business is doing.
Quarterly reporting means:
- Better visibility of your tax bill
- Less chance of nasty surprises in January
- More time to plan and budget
3. Finalise your tax once a year
At the end of the tax year, you’ll still need to submit a couple of final pieces:
- An End of Period Statement (EOPS) for each income source (property, self-employment, etc.)
- A Final Declaration to confirm your full tax position (including employment, dividends, or other income)
Your payment deadlines won’t change. 31 January still applies.
What qualifies as income under Making Tax Digital for Landlords?
MTD qualifying income includes:
- Rent from UK properties
- Income from Furnished Holiday Lets (FHLs). Note: FHL tax rules are being scrapped from April 2025
- Rental income from overseas properties if you live in the UK
- Any deposits kept for repairs. These count as income, though the repair cost can be claimed as an expense
What doesn’t count:
- Sale proceeds from property. These fall under Capital Gains Tax
- Income held in a limited company. MTD for Corporation Tax is a separate plan
Got a property in a company name? MTD for landlords doesn’t apply—but keep an eye out for future changes.
What if your situation is unique as a Landlord?
Most landlords will be caught by MTD based on income alone. But there are a few exceptions:
- Joint ownership: Only count your share of the income
- Limited companies: MTD for ITSA doesn’t apply
- Low income: If your total gross income is under £30,000, you’re out of scope (for now)
- Digital exclusion: If you can’t go digital due to age, disability or access issues, you can apply for an exemption
How to prepare for Making Tax Digital for Landlords
MTD might not kick in for a while, but getting ahead now means no last-minute panic. Here’s how to get sorted:
Choose the right software
Pick an HMRC-approved tool that suits your needs. Look for:
- Easy data entry or bank feeds
- Solid customer support
- Cloud access
- Affordability
If you’re unsure, your accountant can help you compare options.
Start practising digital record keeping
Even if MTD doesn’t apply to you yet, it’s smart to start tracking income and expenses digitally now. That way, you’re not scrambling when it becomes mandatory.
Open a separate bank account for your property income and expenses to keep things tidy. It’ll make your bookkeeping (and accountant’s job) far easier.
Speak to an accountant
If you already use one, have a chat—they’ll likely be preparing for MTD too. They can:
- Help you pick software
- Handle quarterly submissions
- Keep you compliant without stress
Running things yourself? You’ve still got time to build the right system before the deadline.
Consider joining the MTD pilot
Want to test it out early? You can join HMRC’s MTD for ITSA pilot if you meet the criteria. It’s a good way to trial the new system before everyone else jumps in.
Key quarterly deadlines for Making Tax Digital for Landlords
Once MTD starts, you’ll submit four updates per tax year. Here’s when they’re due:
Period | Deadline |
6th April – 5th July | 5 August |
6th July – 5th October | 5 November |
6th October – 5th January | 5 February |
6th January – 5th April | 5 May |
These don’t have to be perfect. You’ll finalise everything with your EOPS and Final Declaration later. But staying on top of them keeps your tax admin smooth and stress-free.
Stay compliant with Making Tax Digital for Landlords using Sleek
Staying on top of Making Tax Digital isn’t just about ticking a box. It’s about keeping your landlord business compliant, penalty-free, and ready for what’s next.
At Sleek, we help property owners and landlords stay ahead of tax changes, with smart software and expert support that keeps the admin under control.
Need help getting ready for MTD? Let’s sort it out. Speak to our team today.
Get your business ready for MTD with Sleek's expert support
FAQs on Making Tax Digital for Landlords
Do I need to follow MTD if I only rent out one property?
It depends on your total income. If your gross rental income (before expenses) is over £50,000 from April 2026—or over £30,000 from April 2027—then yes, you’ll need to comply, even with just one property.
Does MTD apply to landlords with limited companies?
No. If your property is owned through a limited company, MTD for Income Tax doesn’t apply. Instead, your company will continue filing Corporation Tax returns—and future MTD rules for Corporation Tax may apply later.
What’s included in my ‘qualifying income’?
Qualifying income includes all your gross rental income, income from furnished holiday lettings, and overseas property income if you’re a UK resident. You’ll also need to include self-employed income if applicable.
Can I still use spreadsheets for my records?
Only if they’re linked to HMRC through bridging software. For most landlords, moving to MTD-compatible cloud software is easier and future-proof.
What if I don’t feel confident using digital tools?
You may be eligible for an exemption if you can’t use digital systems due to age, disability, or location. You’ll need to apply directly to HMRC to confirm this.
Will I still need to do a Self Assessment?
Not in the traditional sense. Under MTD, your quarterly updates and End of Period Statement (EOPS) replace most of the Self Assessment process. You’ll still submit a final declaration to confirm all income sources each year.
Can my accountant do this for me?
Yes. Accountants can manage your MTD submissions and software setup. If you work with one, it’s worth checking they’re MTD-ready. (Like Sleek!)
