Making Tax Digital for Landlords: The Complete Guide

Making Tax Digital for landlords means keeping digital records of rental income and expenses, sending HMRC a quarterly summary through recognised software, and filing a year-end tax return by 31 January. It applies if gross property and self-employment income exceeds £50,000 (from April 2026), £30,000 (April 2027) or £20,000 (April 2028).

Last updated: 2 November 2026. Applies across the UK.

MTD for Income Tax is a UK-wide HMRC rule, so unlike most of our tenancy guidance it applies to landlords in England, Wales, Scotland and Northern Ireland. This guide covers who is in scope, what you must do each quarter and each year, the penalty regime, and how to get your records ready.

What Making Tax Digital for Income Tax is

MTD for Income Tax changes how landlords and sole traders report to HMRC. Instead of one annual Self Assessment return built from a year of paperwork, you keep records digitally and send short summaries every three months.

HMRC is clear that quarterly updates are summaries, not extra tax returns. You still submit one tax return a year, but you do it through compatible software rather than the old online Self Assessment form.

The rules became mandatory on 6 April 2026 for landlords and sole traders with qualifying income over £50,000. They widen in two further stages.

MTD timeline for landlords

Dates assume standard update periods. HMRC writes to people it identifies as in scope, but GOV.UK says that if you don’t receive a letter you are still responsible for checking whether and when you must start.

HMRC estimates about 1,077,000 more sole traders and landlords will join from April 2027, based on 2024 to 2025 returns. If you are one of them, your 2025 to 2026 return (due by 31 January 2027) is the one that counts.

Who MTD for Income Tax applies to

GOV.UK says MTD applies to sole traders and landlords who are registered for Self Assessment, have self-employment or property income, and have qualifying income above the threshold.

Qualifying income

Qualifying income is your total income from self-employment and property, before expenses. For landlords that means gross rent, not profit. Mortgage interest, letting agent fees and repairs do not reduce it.

It includes UK property income, foreign property income if you were UK tax resident, and your share of jointly owned property income. It excludes PAYE employment income, pensions, dividends (including from your own company) and your share of partnership profit. We cover the detail in our qualifying income guide.

Joint property

Only your share counts. GOV.UK’s example: a jointly owned property producing £50,000, split equally, gives each owner qualifying income of £25,000 from it. See our joint property guide.

Limited companies and partnerships

MTD for Income Tax is for individuals. Rent received by a limited company is the company’s income, not yours, and dividends you take from it are excluded from qualifying income. Partnerships are not currently required to use MTD; HMRC will set a timeline later. More in our limited company landlords guide.

Exemptions

Some people are exempt automatically, including those without a National Insurance number before the tax year starts, personal representatives of someone who has died, and people with a power of attorney or legally appointed deputy acting for them. Others can apply, most commonly because they are digitally excluded through age, health, disability, religious belief or no internet access.

HMRC will not accept unfamiliarity with software, having previously filed on paper or the cost of signing up as reasons on their own. See our exemptions guide.

Not sure where you stand? Our Am I in scope? guide walks through worked examples.

What you have to do under MTD

1. Keep digital records

You must keep digital records of property and self-employment income and expenses using compatible software. Each record needs the amount, the date, and the category, using the same categories as Self Assessment.

Records start on 6 April if you use standard update periods, or 1 April if you choose calendar periods. You only need records for property and self-employment, not for savings or employment income.

2. Send quarterly updates

Every three months your software totals your records into categories and sends a summary to HMRC. Each update covers the tax year so far, so corrections made in your records flow into the next update automatically.

You must send an update even if you had no income or expenses in a period. Read the full rules in our quarterly updates guide.

3. Submit your tax return

After the fourth update, you check and adjust the figures, add any other income such as savings or dividends, claim reliefs and allowances, and submit one tax return for the year through your software. This is the step many people still call the final declaration. The deadline is 31 January after the tax year ends.

4. Pay your tax

Payment dates are unchanged by MTD, but the late payment penalty regime is new. See the penalties section below.

Quarterly update deadlines

If you joined in April 2026, your second update (to 5 October 2026) is due on 7 November 2026. You must choose standard or calendar periods before your first update and cannot change for the rest of that tax year.

Software: what counts

HMRC does not provide MTD software. You need software that HMRC recognises, and GOV.UK has a software finder to help you choose. You can use one product for everything or combine several.

Spreadsheets are still allowed for record keeping, but you need bridging software to connect them to HMRC for quarterly updates and the tax return. Many landlords also keep their records in a property management system and let an accountant file.

ORBIT sits in that last group. It is MTD-ready record keeping, not HMRC-recognised filing software, and it never files on your behalf. Our MTD software for landlords page sets out exactly what it does and doesn’t do.

Penalties under MTD

Late submission: penalty points

Each missed deadline earns one penalty point, even if you have several businesses. When you reach 4 points you get a £200 penalty, and another £200 for each further missed deadline.

For 2026 to 2027 there are no points for late quarterly updates, though a late tax return still earns one. Quarterly updates start counting from 2027 to 2028. Below the threshold, points expire 24 months after the missed deadline.

Late payment

In your first MTD year you get 30 days rather than 15 before a late payment penalty applies, but only once. Agreeing a payment plan with HMRC pauses penalties while you keep to it. More in our MTD penalties guide.

What MTD doesn’t change

MTD changes how you report, not what is taxable. The rules on allowable expenses and the basic rate tax credit for finance costs (see our mortgage interest relief guide) work as before. Accounting and tax adjustments are made at year end, not in each quarterly update.

If your circumstances change

If your qualifying income stays below the relevant threshold for 3 consecutive tax years, you can opt out. HMRC uses your fourth quarterly update for the third year to check eligibility, and the opt-out option appears in your HMRC online account only if you qualify.

Opting out ends digital records and quarterly updates, but you must still file a Self Assessment return.

How to get ready

1. Work out your qualifying income from your 2025 to 2026 figures: gross rent plus any self-employment turnover.
2. Decide who files. Yourself through HMRC-recognised software, or your accountant.
3. Get your records digital now. Set up each property in ORBIT or your chosen system and start recording with date, amount and category.
4. Pick standard or calendar periods before your first update.
5. Sign up. You must be registered for Self Assessment and have filed a return in the last 2 years. Agents can sign clients up.
6. Diarise the deadlines: 7 August, 7 November, 7 February, 7 May and 31 January.

Guides in this series

• Making Tax Digital for landlords: are you in scope?
• MTD quarterly updates: deadlines and what to submit

Further guides on qualifying income, jointly owned property, limited company landlords, exemptions and penalties are in preparation.

This guide is general information, not tax advice.