Government Support for Landlords Ahead of Making Tax Digital

The UK government has reiterated its commitment to supporting landlords as the Making Tax Digital (MTD) scheme for income tax approaches its implementation date in April 2026. Under this scheme, landlords with rental income exceeding £50,000 will be required to maintain digital records and submit quarterly updates to HM Revenue & Customs (HMRC) using authorised MTD-compliant software.

Despite this, uptake has been slow. Reports indicate that only around 5% of taxpayers, including landlords, have registered for MTD so far, with less than a month remaining before the scheme becomes mandatory. This low registration rate has raised concerns about readiness within the private rented sector.

What Making Tax Digital Means for Landlords

From April 2026, landlords earning over the £50,000 threshold must transition from traditional paper-based record-keeping and annual tax returns to a fully digital system. This involves keeping digital records of income and expenses and submitting quarterly updates to HMRC. The aim is to improve accuracy, reduce errors, and streamline tax affairs.

Labour MP Tanmanjeet Singh Dhesi recently asked the government about the adequacy of support available for sole traders and landlords to meet the MTD deadline. In response, Labour MP Dan Tomlinson highlighted the government’s ongoing efforts to prepare those affected.

Government Measures to Aid Compliance

Tomlinson explained that the government is undertaking a range of activities to ensure landlords and small businesses are ready for MTD. These include targeted media campaigns and awareness letters designed to inform landlords of their obligations. The government is also developing detailed guidance and collaborating with software providers to offer a broad selection of MTD-compatible products tailored to different needs and budgets.

Importantly, free software options will be available to support landlords with simpler financial affairs. Additionally, a dedicated team of fully trained MTD advisors will provide support through HMRC’s Self-Assessment and Agent helplines starting in April 2026. Further assistance will be offered via webinars, industry engagement, and marketing activities aimed specifically at those affected by the changes.

Concerns Over Benefits and Costs

Despite government assurances, some industry voices remain sceptical about the practical benefits of MTD for landlords. Accountant Simon Misiewicz told Property118 that the scheme offers little advantage beyond potentially streamlining existing work. He noted: “There’s no real benefit beyond maybe streamlining some of the work you already do, does it help with tax returns and submissions? The truth is, I can’t see how.”

Misiewicz also pointed out that submitting quarterly returns does not accelerate tax payments or improve cash flow for landlords, as HMRC processes the information only at the end of the year.

The government’s own impact assessment acknowledges that landlords earning over £50,000 could face transitional costs averaging £285, with ongoing additional annual costs around £115. This highlights the financial implications landlords should consider when preparing for MTD compliance.

What This Means for UK Landlords

Landlords in the private rented sector with income above the £50,000 threshold should begin preparing now to meet MTD requirements. While the government is providing support through guidance, software options, and helplines, landlords must ensure their record-keeping systems are compatible and that they understand the quarterly reporting process.

Failure to comply with MTD could result in penalties, so early engagement with the scheme is advisable. Landlords should also be aware of potential costs involved and factor these into their financial planning.

Suggested internal link anchors

• Making Tax Digital
• HMRC support for landlords
• MTD-compliant software
• landlord tax obligations
• quarterly tax updates
• private rented sector compliance
• landlord record keeping
• tax digitalisation impact
• landlord financial planning
• MTD transitional costs

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/