Making Tax Digital (MTD) is HMRC's programme to modernise the UK tax system by requiring businesses and landlords to keep digital records and submit quarterly tax updates instead of a single annual self-assessment return. From April 2026, landlords earning £50,000+ must comply.
What's Changing for Landlords?
The way many UK landlords report their rental income is about to change fundamentally. HMRC's Making Tax Digital (MTD) programme is being rolled out to modernise the tax system, and it will require landlords to keep digital records and report income far more frequently than before.
Under the current self-assessment system, most landlords submit just one tax return per year — either online by 31st January or on paper by 31st October for the preceding tax year.
Under Making Tax Digital, this changes significantly. Landlords will need to:
- Keep digital records of all rental income and expenses using HMRC-compatible software
- Submit quarterly updates to HMRC summarising their income and expenditure
- Complete a final annual declaration to confirm their overall income and finalise their tax position
While this doesn't mean paying tax quarterly, it does mean reporting far more frequently. This is a significant shift for landlords who may be used to compiling figures once a year, or who have relied on spreadsheets or paper records.
When Are These Changes Happening?
The Making Tax Digital rollout will happen in phases, based on gross income from property or self-employment:
- April 2026: Landlords with gross income of £50,000 or more (based on the 2024/25 tax year) must comply
- April 2027: The threshold drops to £30,000 or more (based on the 2025/26 tax year)
- April 2028: Landlords with gross income of £20,000 or more (based on the 2026/27 tax year) will be included
HMRC has indicated that the scheme may be expanded further in future, bringing even more landlords into the system over time.
How to Prepare
Although there are exemptions and detailed rules around who qualifies and how income is calculated, it's vital to start preparing now. Here's what we recommend:
- Review your record-keeping systems — if you're still using spreadsheets or paper, now is the time to switch to digital
- Speak to your accountant — they can advise whether you fall within the first wave and help you choose compatible software
- Check HMRC's guidance on eligibility and requirements
- Consider your mortgage position — if you're a buy-to-let landlord, now is a good time to review your mortgage deal alongside your tax obligations
If you're a buy-to-let landlord looking to review your mortgage as part of your financial planning, our fee-free advisors can help you find the most competitive deal for your situation.
Frequently Asked Questions
- Does Making Tax Digital mean I have to pay tax quarterly?
- No. You'll need to submit quarterly reports of your income and expenses, but your actual tax payment schedule doesn't change. You'll still settle your tax bill as part of your annual declaration.
- What software do I need for Making Tax Digital?
- You'll need HMRC-compatible software that can keep digital records and submit quarterly updates. HMRC maintains a list of approved software providers on GOV.UK.
- Does MTD apply if I only have one rental property?
- It depends on your gross income, not the number of properties. If your total gross income from property or self-employment exceeds the threshold for your phase, you'll need to comply regardless of how many properties you own.
Sources & References
- Making Tax Digital — GOV.UK
- MTD for Income Tax — HMRC
Need Expert Advice?
Speak to one of our mortgage advisors for free, personalised guidance.
Get Your Free Quote