Making Tax Digital (MTD) for Income Tax is one of the biggest changes landlords will face and many still aren’t fully aware of what it means for them.
If you earn any income from renting out all or part of a property, you may soon exceed the new thresholds and be required to comply with MTD for Income Tax.
With the first phase taking effect in April 2026, landlords must act now to understand their legal responsibilities and prepare.
What is MTD?
MTD is a Government initiative set to modernise the tax system by requiring businesses and landlords to keep digital records and submit information to HMRC through approved software.
Instead of filing one Self Assessment return, MTD introduces a more frequent and digital approach to tax reporting.
MTD for Income Tax will apply to landlords and sole traders with a total gross income of over £50,000.
The threshold will drop to £30,000 in 2027 and £20,000 in 2028, bringing thousands more landlords into the system over time.
Why are landlords affected?
Many landlords may not realise they are classed as a business for tax purposes and it is crucial they know how MTD will affect them as the reforms are fast approaching.
If your gross rental income before expenses exceed the MTD threshold, you must remain compliant even if you have a single property or rent out a property alongside employment.
MTD applies to:
It does not apply to income from lodgers under Rent a Room relief, PAYE income, pensions, dividends or capital gains.
What will landlords have to do under MTD?
Landlords must keep accurate digital records of all rental income and property-related expenses.
It will be a requirement to use HMRC-approved MTD software to maintain these records and submit information to HMRC.
Landlords must send digital quarterly updates throughout the year, followed by an End of Period Statement (EPOS) to confirm their figures.
They will also need to submit a final declaration, which replaces the traditional tax return process and confirms their total income from all sources.
MTD can be confusing and landlords should seek financial support immediately to understand their reporting obligations and stay compliant.
How can landlords prepare for April 2026?
Landlords should prepare for MTD by first checking whether their property income is likely to exceed the relevant threshold by April 2026.
It is important to start the transition and move away from paper records and basic spreadsheets to keep digital records before it becomes mandatory.
Landlords should explore different MTD software options to find a system that suits their level of experience and the size of their property portfolio.
MTD is bringing new changes and financial advice is important for landlords to understand the reporting deadlines and the type of information required.
Our professional team can help you be prepared for the deadline and prevent late-filing penalties.
To learn whether your property falls within the threshold, contact our team today.
