Making Tax Digital for landlords: what you need to know and do

Last updated: 6 November 2026. Statutory rules, submission deadlines and penalty regimes verified against HMRC guidance on 6 November 2026.

Making Tax Digital for landlords is now in force. Since 6 April 2026, individuals with qualifying gross income over £50,000 have been required to keep digital records and report their income to HMRC quarterly. The threshold falls to £30,000 in April 2027 and £20,000 in April 2028. Affected landlords must also complete their annual tax return using compatible software.

Managing a portfolio already generates plenty of paperwork. Balancing rent payments, maintenance invoices, mortgage statements and letting agent deductions takes time, and MTD for landlords adds new responsibilities to that workload. How much difference MTD makes to your daily routine depends largely on how you already manage your financial records.

Whether you’re already submitting quarterly figures under the 2026 mandate or getting ready for the April 2027 threshold, this guide explains how HMRC assesses your qualifying income, what records you need to keep, when updates are due and how to prepare your property business.

What is Making Tax Digital for landlords?

Making Tax Digital is HMRC’s programme to move tax record-keeping and reporting into compatible software. For individual landlords, the relevant scheme is Making Tax Digital for Income Tax, previously known as MTD for ITSA.

For landlords within scope, three things change:

1. You must keep digital records of your rental income and allowable property expenses.
2. You must send HMRC a summary of those figures every three months using compatible software.
3. You must complete your annual tax return through your software by 31 January following the end of the tax year.

MTD doesn’t change how your taxable profit is calculated or create four separate tax bills each year. You still pay your Income Tax on the usual schedule, with a balancing payment on 31 January and standard payments on account on 31 January and 31 July.

HMRC runs separate digital schemes for different taxes. MTD for VAT applies only if you run a VAT-registered business, such as certain commercial property lets. Limited companies paying Corporation Tax are outside MTD for Income Tax completely, as HMRC dropped plans for Corporation Tax MTD. If you hold buy-to-let properties inside a limited company, your company accounts aren’t affected.

Take a landlord who currently tracks rent and repairs on desktop spreadsheets and hands a folder of receipts to their accountant every January. Under MTD, that annual catch-up no longer meets HMRC’s rules on its own. They need to maintain digital records throughout the year and send quarterly updates straight from software to HMRC. They can still use spreadsheets, provided they link them to HMRC-recognised bridging software.

For more technical detail on the legislation, see our consolidated guide to MTD for ITSA for landlords.

Does MTD apply to me?

Whether you have to use MTD comes down to one figure: your qualifying income. It doesn’t depend on how many properties you own, how many rooms you let or how much profit is left after costs.

How do I work out my qualifying income?

HMRC defines qualifying income as your combined gross income from self-employment and property before deducting any expenses, repairs, agent fees or mortgage interest.

Your qualifying income includes:

• Gross rental income from UK properties.
• Gross rental income from overseas properties, if you’re resident in the UK.
• Gross turnover from any sole-trader self-employment.

You don’t include employment salary, state or private pensions, dividends (including dividends from your own limited company) or your share of profits from a partnership.

Here’s how the rules work for three landlords with different sources of income:

Landlord	Financial position	Qualifying gross income	MTD mandation
Landlord A	£42,000 gross rent and £40,000 employment salary	£42,000	April 2027
Landlord B	£55,000 gross rent, with £18,000 net profit after costs	£55,000	April 2026
Landlord C	£60,000 gross rent shared equally with a spouse	£30,000 each	April 2028 (assuming no other income)

What if I own property jointly?

If you own a rental property with someone else, HMRC looks at your share of the income when deciding whether you need to use MTD. You’ll each be assessed individually, so it’s possible for one owner to enter the system before the other.

Married couples and civil partners living together are generally taxed on a 50:50 share of income from jointly owned property, even where their ownership shares differ.

Where you genuinely own both the property and its income in unequal shares, you can declare the actual split to HMRC using Form 17. You’ll need evidence of your ownership arrangement, and the declared shares will determine how much rental income counts towards each person’s MTD threshold.

What about limited-company and non-resident landlords?

Properties held through a limited company fall outside MTD for Income Tax. If you own some properties personally and others through a company, only the rental income belonging to you personally counts towards your MTD qualifying income. Salary and dividends from the company are excluded too.

For more information about the different ownership structures, see our guide to forming a limited company as a landlord.

Non-resident landlords with UK rental income also need to consider MTD, although exemptions apply in some circumstances. If you use the SA109 residence pages, check your position against HMRC’s latest guidance before registering.

Can I get an exemption?

HMRC provides exemptions for specific groups, split between automatic exclusions, formal digital exclusion claims and temporary deferrals:

• Automatic exemptions: You’re automatically exempt if you don’t have a National Insurance number, or if you’re filing as a trustee or personal representative administering an estate.
• Digital exclusion: You can apply to HMRC for an exemption if it isn’t practical or reasonable for you to use computers, software or the internet because of your age, a disability, religious beliefs or where you live. HMRC reviews each application individually. Being unfamiliar with software or wanting to avoid subscription costs won’t qualify.
• Temporary Budget 2026 deferrals: In the 28 October 2026 Budget, the government deferred MTD until further notice for four specific groups: people receiving qualifying care relief (such as foster carers), non-UK resident entertainers and sportspeople, people expecting to become non-resident, and taxpayers HMRC can’t yet offer a digital service to (including insolvent individuals).

If you’re granted an exemption, you’ll still need to meet your tax obligations by filing your annual Self Assessment return the traditional way.

When do I need to start?

Your start date depends on your gross qualifying income as reported on an earlier Self Assessment return:

Qualifying gross income	Assessed from tax return	MTD start date	First quarterly update deadline
Over £50,000	2024/25	6 April 2026	7 August 2026
Over £30,000	2025/26	6 April 2027	7 August 2027
Over £20,000	2026/27	6 April 2028	7 August 2028

If your qualifying income was over £50,000 on your 2024/25 return and you haven’t registered yet, check your HMRC online account straight away. Since September 2026, HMRC has been automatically signing up people in the first cohort who didn’t enrol themselves. Because that process pulls from older return data, log in to make sure your business details, accounting dates and property sources are recorded accurately.

If your qualifying income sits between £30,000 and £50,000, your start date is 6 April 2027. The 2025/26 tax return you file by 31 January 2027 is the one that confirms it. If that return shows qualifying income over £30,000, you must choose compatible software and register on GOV.UK before 6 April 2027, or ask your accountant to register you through their agent account.

Your first year in MTD always overlaps with your final traditional return. Landlords who started MTD on 6 April 2026 still file their 2025/26 Self Assessment return the old way by 31 January 2027, while keeping digital records and sending quarterly updates for the 2026/27 tax year.

Once you’re in MTD, you can’t simply stop filing quarterly updates if your rent drops for a single year. Your qualifying income has to stay below the threshold for three consecutive tax years before you can opt out.

For every key date across each group, see the full MTD deadline calendar.

What will I actually have to do each year?

Once you’re registered, MTD becomes part of your regular bookkeeping. Rather than pulling a year’s worth of paperwork together in January, you keep digital records throughout the year, send quarterly updates and submit an annual tax return.

Keep digital records

For every rental payment or property expense, your digital records need to show three things:

• The amount of the transaction.
• The transaction date, based on when you received or paid the money under cash-basis accounting, or the relevant date under traditional accounting.
• The relevant tax category, such as rental income, repairs, insurance, professional fees or residential finance costs.

You don’t send copies of receipts, invoices or tenancy agreements to HMRC with your updates, though you must still keep supporting evidence for your tax records. Attaching scanned invoices or photos of receipts directly to transactions in your software keeps everything in one place if HMRC ever asks to check your figures.

HMRC treats all your UK properties together as a single UK property business, so you don’t file a separate quarterly update for each address. Even so, lumping 25 tenancies together in your own books makes it hard to see which properties are actually making money. Logging a £450 boiler repair against 14 Oak Street as soon as the invoice arrives makes it much easier to reconcile the payment, pick the right expense category and see what that specific house earned after costs. Our guide to record-keeping for landlords covers practical ways to set this up.

Send quarterly updates

Every three months, your software totals up the income and expense categories in your digital records and sends a summary to HMRC. Standard quarterly updates cover cumulative periods from the start of the tax year:

Update	Period covered (Standard)	Submission deadline
First quarterly update	6 April to 5 July	7 August
Second quarterly update	6 April to 5 October	7 November
Third quarterly update	6 April to 5 January	7 February
Fourth quarterly update	6 April to 5 April	7 May

You can also choose calendar quarters in your software (ending 30 June, 30 September, 31 December and 31 March). The submission deadlines on the 7th of August, November, February and May stay the same.

Quarterly updates are cumulative running totals, not mini tax returns. You don’t need to calculate your tax bill or make year-end adjustments each quarter. Because each update covers the year from 6 April to date, fixing mistakes is straightforward. If you find an unrecorded May repair invoice after sending your August update, just add it to your software. Your second update in November will automatically include it in your year-to-date totals.

Each business source needs its own quarterly update. A landlord with UK rentals, an overseas property and a sole-trader business sends three separate updates each quarter.

Complete your annual tax return

Sending your fourth update in May finishes your quarterly reporting for the year, but you still have to complete your annual tax return by the following 31 January. HMRC dropped its earlier plans for a separate End of Period Statement (EOPS), so everything is finalised through the tax return in your MTD software.

Between 6 April and 31 January, you or your accountant check the year’s figures, add accounting adjustments (like capital allowances or private-use deductions), include other income such as employment salary, pensions or dividends, and submit the return. Before finalising your figures, check our tax deductible expenses checklist for landlords to make sure you haven’t missed any allowable costs.

How does MTD work with letting agents, joint owners and mortgages?

If someone else collects your rent, you own properties jointly or you have mortgages across your portfolio, there are a few extra things to consider when preparing your MTD records.

Working with letting agents

When your letting agent transfers the monthly rent into your bank account, the amount you receive might already have had fees and other costs deducted.

You’ll need to account for those deductions separately.

Say your tenant pays £1,200 a month. The agent keeps £120 in management fees and sends you the remaining £1,080. For your tax records, you need to show the full £1,200 rental income and the £120 management expense.

Recording only the £1,080 bank transfer would understate your rental income. It might also affect the qualifying-income figure HMRC uses to decide whether MTD applies to you.

The easiest way to avoid problems is to get regular, itemised statements from your letting agent. Ask your agent to send statements on the same date each month. That gives you plenty of time to check the figures, record any repairs or fees and update your records before the next quarterly deadline. For more advice on managing agent handoffs, see our guide on working with letting agents.

Reporting jointly owned properties

HMRC allows two record-keeping simplifications for jointly let properties:

1. Quarterly income-only reporting: You can report just your share of the gross rent in your quarterly updates and leave the shared property’s expenses until the end of the year.
2. Annual expense totals: Instead of logging every individual repair or bill for the shared property each quarter, you can record your share of the expenses as single annual category totals when preparing your tax return.

You can use either option or both. They apply only to jointly owned properties; any properties you own in your sole name must follow the usual quarterly rules for both income and expenses.

Recording mortgage interest correctly

If you own residential rental properties personally, you’ll need to account for mortgage interest differently from most other property expenses.

Under Section 24, you can’t deduct residential mortgage interest from your rental income in the same way as repairs or insurance. Instead, qualifying finance costs receive relief through a basic-rate Income Tax reduction, subject to certain limits. The relevant rate is 20% for 2026/27.

The restriction also covers certain mortgage arrangement fees and other qualifying borrowing costs. Make sure your software records these amounts separately from ordinary property expenses. And remember that mortgage capital repayments don’t qualify for tax relief.

While MTD doesn’t change how Section 24 works, the October 2026 Budget confirmed higher separate tax rates for property income from 6 April 2027 (24%, 44% and 49% in England, Wales and Northern Ireland), making accurate finance-cost records even more important when forecasting your tax bill. See our guide to Section 24 for landlords for a full explanation.

Overseas property

If you receive rental income from properties abroad, you’ll need to account for it separately from your UK property business. HMRC treats your overseas lettings as one foreign property business, with its own quarterly updates.

You still need to maintain the required digital information for each foreign property, but you don’t submit a separate quarterly return for every overseas address.

What happens if I miss a deadline?

Missing a quarterly update and paying your tax late are two different things. HMRC has separate penalties for each, although landlords joining MTD in 2026 and 2027 benefit from temporary relief on late quarterly submissions.

Late quarterly submissions and the penalty easement

Late submissions fall under a points-based system. Once the rules apply in full, each missed quarterly deadline gives you one penalty point. At four points, HMRC charges a £200 penalty, and every further late submission while you’re at four points adds another £200 fine.

However, both the first and second MTD cohorts have a one-year grace period on quarterly penalty points:

MTD cohort	Statutory start date	Quarterly update penalty easement
First cohort (Over £50,000)	6 April 2026	No penalty points for late quarterly updates in 2026/27. Points apply from 6 April 2027.
Second cohort (Over £30,000)	6 April 2027	No penalty points for late quarterly updates in 2027/28 (confirmed in Budget 2026). Points apply from 6 April 2028.

Keep two things in mind about this soft landing. First, it applies only to quarterly updates; late annual tax returns still face penalties. Second, you can’t skip a quarter altogether. You’ll still need to submit all four quarterly updates before you can file your year-end return.

Late tax payments

Tax payment dates haven’t changed: balancing payments are due on 31 January, with payments on account due on 31 January and 31 July.

Interest starts running from the day a payment is late. On top of interest, HMRC charges late-payment penalties on overdue balancing payments. For 2026/27, the charge is 3% of the unpaid tax at day 15 and another 3% at day 30 (subject to a first-year 30-day grace period), plus a 10% annualised penalty charged daily from day 31. From 2027/28, those first two charges rise to 4% at day 15 and 4% at day 30, alongside the 10% annualised daily charge.

Late-payment penalties don’t apply to payments on account, though interest still runs on any overdue amount. For full details on point expiry and appeals, see our guide on how MTD penalty points and late-payment charges work.

What software do I need for MTD?

HMRC doesn’t provide its own MTD filing software, so you’ll need to choose a commercial product from the official GOV.UK list of compatible software.

Make sure any tool you pick supports property income, as some packages are built solely for self-employed trades. If you’re running a larger portfolio, look for software that handles:

• UK and overseas property businesses.
• Income and expenses tracked by individual property as well as across the whole portfolio.
• Open Banking feeds for matching rent payments.
• Letting agent statement breakdowns (separating gross rent from fees and repairs).
• Joint ownership percentage splits.
• Separate tracking for Section 24 finance costs.
• Direct access for your accountant.
• Both quarterly updates and the final annual tax return.

A landlord with a single flat and no mortgage might get by with a spreadsheet and bridging software. When you’re managing 20 or 40 tenancies with different co-owners, regular maintenance invoices and monthly agent statements, spreadsheets quickly become unwieldy and prone to formula errors. To compare the main options side by side, see our roundup of the best MTD software for landlords.

Landlord Vision is HMRC-recognised for Making Tax Digital for Income Tax and built specifically for residential portfolio landlords. Your rent schedules, expense receipts, bank feeds and tenancy records sit in the same place as your MTD reporting, so your quarterly updates pull straight from the figures you already use to run your properties. You can test it with your own portfolio through a 14-day free trial of Landlord Vision.

Is there any upside to MTD for landlords?

If you’ve spent years keeping your rental accounts up to date, MTD might feel like another set of deadlines without much reward. And there is more administration involved. You’ll need compatible software, regular bookkeeping and a reliable way of getting information from letting agents.

However, there’s something to be said for knowing how your portfolio is performing throughout the year.

When your income and expenses are recorded regularly, you have a better picture of what individual properties are costing you. Unexpected repairs, rising maintenance bills and changes in rental income become easier to spot. Your accountant also has more current figures to work with, which should make preparing your annual return more straightforward.

The benefits will depend on how you currently run your accounts. A landlord already using detailed accounting software might notice little difference beyond the reporting requirements. Someone who still spends January sorting through receipts and bank statements has more to gain from adopting better habits.

MTD won’t remove the work involved in running a property business. But the records you maintain to satisfy HMRC should also help you understand where your money is going.

How do I get ready? An MTD checklist for portfolio landlords

If you’re joining MTD in April 2027, or checking that your current setup is sound, work through these steps:

1. Check your qualifying income: Review the gross property income and self-employment turnover reported on your 2025/26 Self Assessment return. Remember to count only your share of jointly owned property income, and don’t deduct expenses when checking the threshold.
2. List how each property is owned: Separate properties held in your sole name, jointly with others and inside a limited company. Check whether any unequal splits with a spouse need a Form 17 declaration.
3. Agree roles with your accountant: Decide whether you’ll keep the digital records and let your accountant review and file, or hand the whole process over to them.
4. Pick HMRC-recognised software: Check that it supports property income, joint ownership shares, Section 24 finance costs and the year-end tax return.
5. Register for MTD: Sign up on GOV.UK before 6 April 2027 if your qualifying income exceeds £30,000. If HMRC signed you up automatically for 2026/27, log in to check that your property sources and accounting periods are right.
6. Set up your digital records from 6 April: Connect your rental bank accounts via Open Banking and start attaching digital copies of invoices as they come in.
7. Agree a routine with your letting agent: Ask for itemised statements on a set date each month showing gross rent, management fees and repair deductions separately.
8. Put the deadlines in your calendar: Add the four quarterly update deadlines to your calendar, along with 31 January for your annual return and tax payment, and 31 July for your second payment on account where applicable.
9. Factor in the 2027 tax rate changes: Property income tax rates are increasing from April 2027. In England, Wales and Northern Ireland, the new rates are 24%, 44% and 49%. Review your expected liability when planning future tax payments.
10. Reconcile little and often: Set aside regular time to match rent payments and categorise expenses, rather than leaving three months of bookkeeping until the week before a deadline.

For a printable step-by-step plan, download our free Making Tax Digital report for landlords.

Frequently asked questions

Conclusion

Making Tax Digital brings more frequent reporting, but it doesn’t have to take over how you run your portfolio. If you’re already in the April 2026 group, the priority is keeping your records current so that quarterly reporting doesn’t become another last-minute administrative headache. If you join in April 2027, checking your 2025/26 figures and getting your software and agent statements sorted before next April will save a lot of last-minute rushing.

Landlord Vision brings HMRC-recognised MTD filing together with the tools you already need to manage tenancies, track property-level profit and reconcile rent payments. To see how it works with your own properties, start a 14-day free trial of Landlord Vision or book a demo with our team.