HM Revenue & Customs (HMRC) is introducing Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) – and if you are a landlord earning over £50,000 per year, this means changes are coming in April 2026.
Here’s what you need to know about the upcoming changes to tax reporting under MTD for ITSA and how you can prepare.
MTD for ITSA – what’s changing?
While you currently file your Self-Assessment (SA) tax return once a year, MTD for ITSA will mean a move to more regular, digital reporting.
From 6 April 2026, landlords with an income of £50,000 or more will need to:
Landlords with an income of between £30,000 and £50,000 will also need to comply with these changes from April 2027. Eventually, landlords earning £20,000 or more will be required to comply with MTD for ITSA, although a deadline for this has not been announced.
The changes under MTD for ITSA are designed to make tax reporting more efficient and reduce errors.
However, adapting to a brand-new system can feel overwhelming.
With the first letters from HMRC arriving from April 2025, now is the time to start preparing.
Determine whether you will be affected
You’ll need to add together all property and sole trader income to calculate your total income for the year. This includes rental income but also revenue from other ventures.
If you earn £50,000 from property alone, or from a combination of property and sole trader income, you will need to comply with MTD for ITSA from April 2026.
HMRC will be writing to affected taxpayers based on their 2023-24 Self-Assessment returns.
Some landlords may qualify for an exemption due to age, disability, or lack of access to digital tools. If you think this may apply to you, we can assist with your application.
Landlords who are registered as limited companies should continue to share limited company accounts and company tax returns with HMRC and Companies House.
Set up the right software
MTD requires you to use compatible software to keep records and submit updates.
If your accounting software is “MTD-compatible,” this means it has the facility for VAT Returns to be filed with HMRC and receive information back from HMRC directly, such as confirmation that a VAT Return has been received.
HMRC has published a list of accounting software providers who currently have MTD-compatible software.
However, if you are unsure which software is best for you, we can help you find the right solution for you and your business.
These packages will not only future-proof your business in readiness for each new Making Tax Digital requirement in the coming years, but they will also enable you to share financial information in real time with our team and quickly produce bills and invoices.
Decide when to sign up
HMRC has provided two options for landlords to sign up.
Option one is to sign up early for the 2025-26 tax year.
HMRC is currently piloting the MTD for ITSA system to develop an effective service.
If you are a landlord, you can voluntarily sign up for MTD for ITSA – meaning you will start using compatible software to keep business records digitally and send quarterly Income Tax (IT) updates to HMRC instead of filing an annual Self-Assessment tax return.
Taking part in this voluntary sign-up period gives you time to get used to MTD for ITSA before it becomes mandatory, with access to HMRC’s specialist support team and expert advice from your accountants.
Landlords who will not be required to comply with MTD for ITSA from April 2026 can also choose to sign up early.
The second option is to wait until April 2026 to comply with MTD for ITSA.
If you choose this option, it is still worth testing new software and reporting systems well in advance to make sure you are ready for the 2026-27 tax year.
How we can help
Transitioning to MTD for ITSA can seem difficult and scary – but it doesn’t have to be.
Our expert accountants can support you with MTD for ITSA every step of the way, from choosing compatible cloud accounting systems to helping you meet your quarterly reporting requirements.
We are so confident in our basic debit and credit knowledge that we will work with any software you choose.
Whether you are already an expert or just starting out, our team will make sure you get the most out of online accounting, empowering you to handle the transition to MTD for ITSA with ease.
If you need to comply with MTD for ITSA in 2026, it is vital to prepare now. Contact us today for expert, tailored advice.
