When do landlords have to use Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax applies to individual landlords registered for Self Assessment whose qualifying income is above the relevant threshold. Landlords over £50,000 in 2024 to 2025 had to start on 6 April 2026. The threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028. It does not currently apply to limited companies.

Use the free rental yield and ROI calculator to work through the figures for your tenancy.

Who has to use Making Tax Digital, and from when?

You need to use Making Tax Digital for Income Tax if all of the following apply:

• you are a sole trader or a landlord registered for Self Assessment
• you receive income from self-employment or property, or both
• your qualifying income is above the relevant threshold for the tax year

HMRC reviews your Self Assessment return each year. If your income is above the threshold, it should write to you before the start of the following tax year. If you do not receive a letter, it is still your responsibility to check and sign up.

Landlords who hold property through a limited company are not currently required to use the service. Partnerships will be brought in later. HMRC has not confirmed a date.

Use the official tool on Find out if and when you need to use Making Tax Digital for Income Tax.

Landlords who will be brought in from 6 April 2027 should also read Making Tax Digital for landlords from April 2027.

(Source: Find out if and when you need to use Making Tax Digital for Income Tax)

What counts as qualifying income?

Qualifying income is the total gross income you receive in a tax year from self-employment and property, before expenses. It is sometimes called turnover. It is not your profit.

If you jointly own a property, only your share counts. HMRC’s example is two siblings who jointly own a property generating £50,000 and take equal shares: each has £25,000 of qualifying income from that property.

These sources do not count towards qualifying income, even though they may still appear on your tax return:

• employment income (PAYE)
• your share of profit from a partnership as an individual partner
• dividends, including from your own company
• state pension and private pensions

If you have been a sole trader or landlord for less than a full tax year, HMRC will annualise the figure. Six months of rent is doubled to estimate a full year.

(Source: Work out your qualifying income for Making Tax Digital for Income Tax)

What do I have to do?

HMRC’s step-by-step guidance sets five steps:

1. Work out your qualifying income.
2. Check whether you must use the service, using HMRC’s eligibility tool.
3. Choose compatible software before you sign up. HMRC does not provide its own software.
4. Sign up through the HMRC online service, using the same Government Gateway credentials you use for Self Assessment. You must be registered for Self Assessment and have submitted a tax return in the last two years.
5. Use the software to keep digital records, send quarterly updates, and submit your annual tax return, usually by 31 January after the tax year.

Quarterly updates summarise rental income and expenses for each period. They are not tax returns and they do not trigger a tax payment. The annual return remains the point at which your final liability is calculated.

(Source: Making Tax Digital for Income Tax for sole traders and landlords: step by step)

What software can landlords use?

HMRC does not provide software and does not recommend any named product. You must choose compatible software from the official list, or use bridging software if you want to keep records in a spreadsheet and submit through a connector.

Check that any product you choose supports property income, quarterly updates and the annual return. If an accountant or agent acts for you, agree who submits what before the first quarter is due.

(Source: Choose the right software for Making Tax Digital for Income Tax)

What are the penalties?

HMRC has said it will not apply penalty points for late quarterly updates during the first tax year of Making Tax Digital (2026 to 2027). That waiver covers only the quarterly submissions.

Penalties still apply for a late annual tax return and for late payment of tax. Landlords required to use the service from 6 April 2026 still need to submit the 2026 to 2027 annual return by 31 January 2028 and pay any tax due by that date.

Different penalty rules apply if you sign up voluntarily before your threshold requires it.

(Source: Sign up for Making Tax Digital for Income Tax)

Can I get an exemption?

Some people are exempt, including on grounds of digital exclusion. If you are exempt, you do not use Making Tax Digital, but you must still submit a Self Assessment tax return.

Check whether you qualify using HMRC’s exemption guidance, or contact HMRC.

(Source: Find out if and when you need to use Making Tax Digital for Income Tax)

What should I do now?

If you were over the £50,000 threshold and have not signed up, do that now: confirm your qualifying income from your latest return, use the official tool, choose compatible software, and complete sign-up.

If you are below £50,000, check whether you will cross £30,000 in 2025 to 2026 or £20,000 in 2026 to 2027. Starting digital records early is easier than converting a year of paper in one go.

Check where those records stand on your property. Check My Compliance

Last reviewed: 8 October 2026.