HMRC to enroll landlords into Making Tax Digital from September 2026

HMRC to enroll landlords into Making Tax Digital from September 2026

HM Revenue and Customs will begin signing up landlords earning over £50,000 who have not yet joined Making Tax Digital for Income Tax, requiring quarterly digital updates from September 2026.

HM Revenue and Customs (HMRC) has confirmed that from September 2026 it will start enrolling landlords and sole traders who are required to use Making Tax Digital (MTD) for Income Tax but have not yet signed up. This move affects those with income exceeding £50,000 from property or self-employment, who must keep digital records and submit quarterly updates to HMRC. The enrolment process will be phased over several months to help landlords meet their legal obligations.

Since April 2026, landlords and sole traders in this income bracket have been legally required to maintain digital records and send quarterly updates summarising their income and expenses through compatible software. More than 570,000 individuals have already signed up, with over 436,000 having submitted their first quarterly updates. HMRC emphasises that these quarterly updates are not tax returns but are necessary to facilitate the submission of the annual Self Assessment tax return, which remains due by 31 January each year.

Details of the Making Tax Digital enrolment and reporting requirements

Making Tax Digital for Income Tax is a significant step in modernising the tax system, aiming to improve accuracy and reduce errors by requiring digital record keeping and reporting. Landlords and sole traders with income above the £50,000 threshold must use software compatible with HMRC’s systems to submit quarterly updates. These updates provide a snapshot of income and allowable expenses, enabling HMRC to have a more up-to-date view of taxpayers’ affairs throughout the year.

HMRC has stated that for the 2026 to 2027 tax year, there will be no penalty points for late submission of quarterly updates, reflecting a transitional period to allow taxpayers to adjust to the new system. However, failure to comply in subsequent years could lead to penalties. The phased enrolment starting in September 2026 means landlords who have not yet signed up will receive communications from HMRC explaining the process and how to comply.

Craig Ogilvie, HMRC’s Director of Making Tax Digital, highlighted the positive feedback from many users who find the process straightforward when using their chosen software. HMRC plans to publish updated guidance in late August 2026 to assist landlords who receive enrolment letters, clarifying what steps they need to take to comply.

Context and implications for landlords and letting agents

The expansion of Making Tax Digital to landlords earning over £50,000 reflects the government’s ongoing efforts to digitise tax administration and improve compliance. For the private rented sector, this means that landlords with larger portfolios or significant rental income must ensure their accounting practices are fully digital and integrated with HMRC’s systems. This requirement aligns with broader rental reform and regulatory changes that increasingly demand transparency and accurate record keeping.

Many landlords and agents may already be using digital accounting software for rent collection and expense tracking, but the MTD requirement adds a formal obligation to submit quarterly financial summaries. This can affect cash flow management, tax planning, and the timing of financial reviews. Those not yet using compatible software will need to invest in suitable solutions and potentially seek professional advice to meet the new demands.

Letting agents managing portfolios on behalf of landlords should also be aware of these requirements, as they may need to provide accurate and timely financial information to support landlords’ MTD submissions. Agents could consider reviewing their processes and software capabilities to assist clients in complying with these obligations.

Practical considerations and what landlords should do now

Landlords who have not yet signed up for Making Tax Digital should prepare to receive correspondence from HMRC starting in September 2026. It is advisable to review current record-keeping practices and ensure they are compatible with MTD requirements. This includes adopting digital accounting software that can submit quarterly updates directly to HMRC.

Landlords should also familiarise themselves with the distinction between quarterly updates and the annual Self Assessment tax return, understanding that both remain necessary. Early preparation can help avoid penalties in future years once the initial grace period ends. Keeping thorough digital records of rental income and allowable expenses will be essential for accurate reporting.

For those using letting agents, it may be beneficial to discuss MTD compliance and ensure that all financial data provided is accurate and timely to facilitate smooth quarterly submissions. Agents should stay informed about HMRC guidance and be ready to support landlords through the transition.

Remaining uncertainties and future developments

While HMRC has outlined the phased enrolment and the initial penalty-free period, some details remain unclear. The exact timeline for enrolment stages, the nature of communications landlords will receive, and the support available for those unfamiliar with digital accounting are still to be fully detailed. Landlords should watch for the updated guidance promised in late August 2026 for further clarity.

There may also be questions about how this system will integrate with other rental sector reforms, such as deposit protections, landlord licensing, and tenancy regulation changes. The evolving regulatory environment means landlords and agents must remain vigilant and adaptable to new compliance demands.

Keeping your rental properties compliant with Making Tax Digital

Membership of The Landlord Association (TLA) offers practical support for landlords adapting to Making Tax Digital requirements. TLA provides access to compliance resources and guidance on digital record keeping tailored to the rental sector. Members can benefit from document templates, checklists, and expert advice to ensure quarterly updates and tax returns are submitted correctly.

TLA is also developing ORBIT, a new property management and compliance platform currently in BETA testing. ORBIT aims to help landlords and agents organise rental properties and portfolios, manage rental documents, and keep records of key actions such as repairs and inspections. While still in testing, ORBIT includes features to assist with digital record keeping and compliance monitoring relevant to MTD obligations.

Exploring TLA membership and ORBIT BETA access can help landlords stay organised and prepared for ongoing regulatory changes, reducing the risk of errors and penalties related to Making Tax Digital.

Landlords should monitor official HMRC updates and seek professional advice if uncertain about their MTD responsibilities. Early engagement with the new system will ease the transition and help maintain compliance as the digital tax landscape evolves.

Sources: Landlord Today