Making Tax Digital for Landlords: What You Need to Do from April 2026

This article is for general information purposes only and does not constitute legal advice. Landlords should seek independent legal or tax advice for their specific circumstances.

What Making Tax Digital for Income Tax is

Making Tax Digital for Income Tax is a new reporting requirement introduced by HMRC. It requires sole traders and landlords to keep digital records of their income and expenses and send quarterly updates to HMRC using compatible software, rather than filing a single Self Assessment tax return at the end of the year.

The requirement came into force on 6 April 2026 for those above the first income threshold. It applies to individuals who receive income from property or self employment. It does not currently apply to landlords who hold properties through a limited company.

(Source: Making Tax Digital for Income Tax for sole traders and landlords: step by step, GOV.UK, last updated 17 December 2025.)

Does it apply to you

According to GOV.UK guidance, Making Tax Digital for Income Tax applies if all three of the following are true. You are an individual 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.

The thresholds are being introduced in phases. If your qualifying income exceeded £50,000 in the 2024 to 2025 tax year, you are required to use Making Tax Digital from 6 April 2026. If your qualifying income exceeds £30,000 in the 2025 to 2026 tax year, you will be required to use it from 6 April 2027. A further threshold of £20,000 is expected to apply from 6 April 2028, although GOV.UK notes this remains subject to review.

Landlords who hold property through a limited company or a partnership are not currently required to use the service. HMRC has stated that partnerships will be brought in at a later date, but no timeline has been confirmed.

(Source: Find out if and when you need to use Making Tax Digital for Income Tax, GOV.UK, last updated 26 March 2026.)

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 are deducted. This is sometimes referred to as your turnover. It is not your profit.

If you jointly own a property, only your share of the income counts towards your qualifying income. For example, GOV.UK guidance gives the example of two siblings who jointly own a property generating £50,000 in income and receive equal shares. In that case, each sibling's qualifying income from that property would be £25,000.

The following sources of income do not count towards qualifying income: 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. These are reported through your tax return but they do not trigger the MTD requirement.

If you have been a sole trader or landlord for less than a full tax year, HMRC will annualise your income. For example, if you received six months of rental income, HMRC will double the figure to estimate a full year's qualifying income.

(Source: Work out your qualifying income for Making Tax Digital for Income Tax, GOV.UK, last updated 29 January 2026.)

What you have to do

If Making Tax Digital applies to you, there are five steps set out in HMRC's guidance.

First, work out your qualifying income to confirm whether you meet the threshold. Second, check whether you are required to use the service by using HMRC's online eligibility tool. Third, choose compatible software before you sign up. HMRC does not provide its own software. Fourth, sign up for Making Tax Digital through the HMRC online service, using the same Government Gateway credentials you use for Self Assessment. Fifth, use your software to keep digital records, send quarterly updates, and submit your annual tax return by 31 January the following year.

You will need to send four quarterly updates during each tax year, summarising your rental income and expenses for each period. These are not tax returns and they do not trigger a tax payment. Your annual tax return, submitted through your compatible software, remains the point at which your final tax liability is calculated.

(Source: Making Tax Digital for Income Tax for sole traders and landlords: step by step, GOV.UK, last updated 17 December 2025; Sign up for Making Tax Digital for Income Tax, GOV.UK, last updated 7 April 2026.)

Software options for landlords

HMRC does not provide software for Making Tax Digital and does not recommend any specific product. You will need to choose a compatible product from the list of recognised providers published on GOV.UK.

Several options are relevant to landlords. Landlord Vision is a property management platform that includes accounting tools and is developing MTD for Income Tax compatibility. Hammock is designed specifically for landlords and handles rental income tracking alongside MTD submissions. FreeAgent is a general accounting tool popular with sole traders, available free to NatWest, RBS, and Mettle customers, and supports property income reporting. Xero is a larger accounting platform widely used by landlords who work with accountants or operate through limited companies alongside personal portfolios.

For landlords who prefer to continue using spreadsheets, bridging software is available. This type of tool connects to your existing spreadsheet records and submits the required data to HMRC on your behalf.

HMRC has published a software finder tool that asks a series of questions about your circumstances and generates a list of compatible options. Landlords are advised to check that any software they choose supports all their income sources and can handle both quarterly updates and the annual tax return submission.

(Source: Choose the right software for Making Tax Digital for Income Tax, GOV.UK, last updated 2 April 2026.)

Penalties

HMRC has confirmed that it will not apply penalty points for late quarterly updates during the first tax year of Making Tax Digital (2026 to 2027). This means that if you are late sending a quarterly update in year one, you will not receive a penalty point for that specific submission.

However, penalties will still apply for late tax returns and for late payment of tax. The quarterly update waiver covers only the quarterly submissions, not the annual return. Landlords who are required to use Making Tax Digital from 6 April 2026 are still expected to submit their annual tax return by 31 January 2028 and pay any tax owed by that date.

If you are signing up voluntarily before your threshold requires it, HMRC has published separate guidance on the penalty rules that apply to volunteers.

(Source: Sign up for Making Tax Digital for Income Tax, GOV.UK, last updated 7 April 2026.)

Exemptions

Some landlords may be exempt from Making Tax Digital. HMRC guidance states that digital exclusion is one ground for exemption. If you are exempt, you will not need to use the service but you must continue to submit a Self Assessment tax return as normal.

HMRC has published guidance on how to check whether you qualify for an exemption. Landlords who believe they may be exempt are advised to use HMRC's online tool or contact HMRC directly.

(Source: Find out if and when you need to use Making Tax Digital for Income Tax, GOV.UK, last updated 26 March 2026.)

What to do now

Making Tax Digital for Income Tax is now in force for landlords with qualifying income above £50,000. If you have not yet signed up, the steps are: check your qualifying income using your most recent Self Assessment return, use HMRC's online tool to confirm whether you need to register, choose compatible software, and complete the sign-up process through HMRC's online service.

For landlords below the £50,000 threshold, the requirement will apply from April 2027 (£30,000) and April 2028 (£20,000). It is worth reviewing your income position now and considering whether to begin keeping digital records in advance, so that the transition is not rushed when your threshold arrives.

HMRC's full step by step guidance is available at gov.uk/government/collections/making-tax-digital-for-income-tax-for-businesses-step-by-step.

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