Making Tax Digital (MTD) is a major overhaul of the UK tax reporting system.
It moves landlords and other self-assessment taxpayers away from a single annual return towards regular, digital reporting of income and expenses using HMRC-approved software. It builds on earlier digital reporting rules already in place for VAT.
Under MTD landlords will typically:
- Keep digital records of rental income and expenses.
- Submit quarterly summaries of income and expenditure to HMRC.
- Submit an end-of-year final declaration to confirm accuracy and claim allowances.
In effect, instead of one annual tax submission, landlords can expect five digital submissions per tax year.
Who Must Comply — and When?
MTD is being phased in over a few years based on your gross income from property and self-employment:
- From April 2026: landlords with gross rental/self-employment income of £50,000+ must comply.
- From April 2027: the threshold drops to £30,000+.
- From April 2028: it further reduces to £20,000+.
This income is combined across rental and self employment and is based on gross income (before deducting expenses) — a key point many landlords misunderstand.
Limited companies are currently not affected and will continue to report through corporation tax.
Why HMRC is Introducing MTD
The official purpose of MTD is to modernise the UK tax system, reduce errors and fraud, and make reporting closer to real time. Requiring digital records and quarterly submissions helps HMRC get a more accurate and up-to-date picture of taxpayer incomes.
From HMRC’s perspective, this is an extension of the digital approach already used for VAT and aims to improve compliance and accuracy — not explicitly to “take more tax”. That said, critics and landlords do perceive it as an enforcement tool.
How MTD Changes Landlord Reporting
More Frequent Reporting
Rather than one annual return:
✔️ Four quarterly reports throughout the year
✔️ One end-of-year declaration
Digital Record-Keeping
All records must be kept in digital format and submitted via approved software (not paper or basic spreadsheets alone). Bridging software may allow spreadsheets to connect digitally.
Deadlines Matter
Quarterly returns have specific due dates (often early May, August, November, and February), and failure to meet them can now lead to penalty points and fines under HMRC’s new system.
Penalties and Risks
HMRC is moving to a points-based penalty system for late or missing MTD submissions — and penalties can include fines if enough points accumulate.
In some cases, experts fear landlords might face higher compliance costs (software subscriptions, accountant fees) as a result.
Practical Tips for Landlords
Check Your Income Now
Calculate your gross rental (and self-employed) income — not profit — to see if and when you’ll be in scope.
Choose the Right Software Early
Explore HMRC-approved digital solutions ahead of time — there are options from basic bridging tools to dedicated landlord packages.
Get Professional Advice
An accountant can help set up systems and ensure you meet quarterly deadlines — potentially saving you fines and stress.
Stay On Deadlines
Quarterly reporting means tax admin becomes a constant rhythm, not an annual chore — plan your calendar now.
Final Thoughts
MTD isn’t a new tax — but it is a new way of reporting tax. For many landlords, this represents a shift to more disciplined record-keeping, regular interaction with HMRC, and greater reliance on digital systems. While HMRC says the goal is modernisation and accuracy, landlords’ reactions range from pragmatic preparation to frustration with added costs and complexity.
The first Making Tax Digital (MTD) for Income Tax Self Assessment deadline (covering 6 April to 5 July 2026) for taxpayers with income over £50,000 is 7 August 2026.
What Next?
If Making Tax Digital, rising compliance and shrinking margins have made the effort feel disproportionate to the return — you’re not alone. For many ‘accidental’ and ‘part-time’ landlords, the question isn’t “Can I comply?” but “Is this still worth it?”
If being a landlord now feels like more trouble than it’s worth, it may be time to move on — speak to Landlord Sales Agency and take back control.