Making Tax Digital expands quarterly reporting for landlords

Making Tax Digital expands quarterly reporting for landlords

From April 2026, unincorporated landlords with qualifying income over £50,000 must submit quarterly digital tax reports to HMRC, with thresholds lowering in 2027 and 2028. Letting agents can assist but cannot file returns on behalf of landlords.

The UK government’s Making Tax Digital (MTD) initiative is introducing significant changes for private landlords. Starting April 2026, unincorporated landlords whose gross qualifying income exceeds £50,000 for the 2024-2025 tax year will be required to maintain digital records and submit quarterly updates to HM Revenue & Customs (HMRC). This replaces the traditional annual Self-Assessment tax return with a more frequent, digital reporting process. The income threshold will reduce to £30,000 in April 2027 and further to £20,000 in April 2028, progressively expanding the scope of landlords affected.

These changes mean landlords must adapt their record-keeping and reporting practices to comply with the new digital requirements. Lettings agency Beresfords has highlighted how agents and landlords can work together to meet these obligations, while clarifying the limits of agent involvement in tax submissions.

Details of the Making Tax Digital requirements for landlords

MTD applies to unincorporated landlords—those who own property personally rather than through a company. Incorporated landlords remain outside this scheme for now, continuing with existing tax filing arrangements. The phased rollout is based on gross income levels from property and other relevant self-employment sources.

Landlords must submit four quarterly reports each year, covering specific periods aligned to the tax year, followed by a final declaration confirming the accuracy of the information, including any allowances or additional income. The quarterly filing deadlines are:

• 6 April to 5 July – deadline 7 August
• 6 April to 5 October – deadline 7 November
• 6 April to 5 January – deadline 7 February
• 6 April to 5 April – deadline 7 May

All submissions must be made using HMRC-approved digital software, as paper returns will no longer be accepted for landlords subject to MTD. Beresfords recommends Nexus by Landlord Studio, a software solution that integrates with their own systems to streamline the transfer of property income and expense data into the required format for HMRC submission.

From April 2027, a points-based penalty system will be enforced for late filings and payments, making timely compliance essential to avoid fines.

Context and implications for landlords and agents

The transition to quarterly digital reporting represents a major shift in tax administration for landlords. Traditionally, landlords have submitted one annual Self-Assessment return, often assisted by accountants or agents. The new system demands more frequent record updates and submissions, increasing administrative workload but potentially improving accuracy and cash flow management.

Letting agents managing properties on fully managed terms can provide much of the necessary financial data, such as rent received and expenses paid, but they typically do not have access to a landlord’s full financial picture. Therefore, agents cannot complete or submit MTD returns on behalf of landlords. Landlords must compile all qualifying income, including from other self-employment sources, and ensure comprehensive digital records are maintained.

This change aligns with HMRC’s broader digital transformation agenda, aiming to reduce errors and improve tax collection efficiency. However, it places new demands on landlords, especially those with smaller portfolios who may be less familiar with digital accounting tools.

Practical considerations for landlords and letting agents

Landlords should start preparing by reviewing their income sources and ensuring they understand whether they meet the MTD thresholds. Early adoption of HMRC-approved software can ease the transition, allowing records to be updated continuously rather than in a rush at quarter-end.

Letting agents can support landlords by providing accurate and timely financial data, but landlords remain responsible for submitting returns and managing their overall tax affairs. Agents should clarify these roles with clients to avoid misunderstandings.

Maintaining organised digital records of rental income and allowable expenses is now crucial. Landlords should also monitor HMRC guidance closely, as further details on software requirements and penalties may evolve.

Uncertainties and what to watch for

While the broad framework of MTD for landlords is clear, some practical details remain uncertain. For example, how HMRC will handle complex cases involving multiple income streams or changes in landlord circumstances is yet to be fully clarified. The effectiveness and user-friendliness of approved software solutions will also influence compliance ease.

Landlords should watch for updates from HMRC and industry bodies, as well as any changes in thresholds or deadlines. The interaction of MTD with other tax reforms or rental sector regulations could also affect reporting requirements.

What landlords should do now

• Assess whether their income exceeds the MTD thresholds and when they will be affected.
• Research and select HMRC-approved digital accounting software suitable for their needs.
• Work with letting agents to ensure accurate financial data is provided promptly.
• Maintain comprehensive digital records of all qualifying income and expenses.
• Stay informed on HMRC guidance and compliance deadlines to avoid penalties.

Early preparation will reduce the risk of errors and fines, and may ultimately streamline tax reporting processes.

Supporting landlords through Making Tax Digital

The Landlord Association (TLA) offers members access to compliance resources and practical information to help landlords adapt to regulatory changes such as Making Tax Digital. TLA’s new property management and compliance platform, ORBIT, currently in BETA testing, is designed to assist landlords and letting agents in organising property records, managing rental documents, and recording key compliance actions. While ORBIT’s full capabilities are still developing, it aims to support landlords in maintaining digital records and monitoring deadlines relevant to MTD.

Membership also provides access to expert advice and updates on tax and rental sector regulations, helping landlords stay ahead of evolving requirements. Landlords interested in exploring these resources can review TLA’s membership options and learn more about ORBIT BETA access.

With MTD introducing a more structured and frequent tax reporting regime, tools and support from membership bodies like TLA can be valuable in managing compliance efficiently.

Looking ahead, landlords should anticipate further digital integration in tax and rental sector administration. Staying proactive in adopting approved software and maintaining accurate records will be increasingly important.

Sources: Letting Agent Today