Making Tax Digital for Landlords: 2026–27 Guide

Making Tax Digital for Income Tax began applying to some landlords and sole traders on 6 April 2026. If you are within the rules, you must keep digital records, use compatible software, send quarterly updates to HMRC and submit your tax return through that software.

The rules are being introduced in stages. Whether you must join depends mainly on your gross qualifying income from property and self-employment, before expenses, as reported on an earlier Self Assessment tax return.

This guide explains who must use Making Tax Digital, what landlords need to record, the quarterly deadlines for 2026–27 and the practical steps to take.

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax is a new way for individuals with property or self-employment income to keep records and report information to HMRC.

If the rules apply, you must:

•  Keep digital records of income and expenses

•  Use software that works with Making Tax Digital for Income Tax

•  Send quarterly updates to HMRC

•  Submit your annual tax return using compatible software

•  Pay the tax due by the normal Self Assessment deadline

Quarterly updates do not replace the annual tax return. They give HMRC a summary of your income and expenses during the year. Your final tax position is confirmed through the tax return after the tax year ends.

Who must use Making Tax Digital?

You must use Making Tax Digital for Income Tax from 6 April 2026 if all of the following apply:

•  You are an individual registered for Self Assessment

•  You receive income from property, self-employment or both

•  Your qualifying income for 2024–25 was more than £50,000

The planned staged thresholds are:

The test is based on the individual taxpayer, not on each property. A landlord with several properties should consider their total share of gross property income together with any gross self-employment income.

What counts as qualifying income?

Qualifying income is the total gross income from self-employment and property before deducting expenses. The figure is normally taken from the Self Assessment tax return for the relevant earlier tax year.

It can include:

•  UK property income

•  Foreign property income

•  Furnished holiday letting income

•  Income from one or more sole-trade businesses

Income such as employment pay, pensions, dividends and savings interest does not count towards the MTD qualifying-income test, although it may still need to be included in the annual tax return.

What happens with jointly owned property?

For jointly owned property, each owner considers the share of gross property income that is taxable on them. The other owner’s share is not added to their qualifying income.

The taxable split may depend on the beneficial ownership and, for spouses or civil partners living together, whether the standard 50:50 rule applies or a valid Form 17 declaration supports a different split.

HMRC provides an easement for jointly let property. For quarterly updates, the landlord can report either their share of total income and expenses or, more simply, their share of total income with a single total-expenses figure. The correct annual figures must still be included in the tax return.

Does MTD apply to property companies and trusts?

These MTD for Income Tax rules apply to qualifying individuals. They do not apply in the same way to rental income received by a limited company, because the company is subject to Corporation Tax rather than Income Tax.

Trustees, personal representatives, partnerships and some other categories are not required to use MTD for Income Tax under the current rules. However, an individual with separate personal property or self-employment income may still be required to join for that personal income.

What must landlords do under MTD?

1. Use compatible software

You must use software that is compatible with Making Tax Digital for Income Tax. This may be accounting software, a record-keeping product linked to bridging software or another HMRC-recognised solution.

2. Maintain digital records

Create digital records of your property income and expenses. Records should be entered by the earlier of the quarterly-update deadline or the date the annual tax return is submitted.

3. Send quarterly updates

Send cumulative summaries of income and expenses through compatible software. A quarterly update is not a tax return, and accounting or tax adjustments are not normally required before it is sent.

4. Submit the annual tax return

After the tax year, use compatible software to finalise the property figures, include other taxable income, claim relevant reliefs and submit the tax return. The normal 31 January filing and payment deadline continues to apply.

What digital records must landlords keep?

Digital records should cover transactions such as:

•  Rent and other property income

•  Letting-agent fees

•  Repairs and maintenance

•  Insurance

•  Service charges and ground rent

•  Professional and accountancy fees

•  Utilities and council tax paid by the landlord

•  Replacement domestic items, where relevant

•  Residential-property finance costs

Keep supporting evidence such as invoices, receipts, statements and tenancy records. Digital record-keeping does not remove the need to retain evidence. MTD digital records must generally be kept for at least five years after the 31 January submission deadline for the relevant tax year.

Can mistakes be corrected?

Yes. If a digital record is incorrect, correct it in the software. Because quarterly updates are cumulative, the corrected figures can flow into a later update. Final accounting and tax adjustments can be made when the annual tax return is prepared.

Is a separate quarterly update required for each property?

Normally, no. UK properties are generally treated as one UK property business, so the update reports the combined figures for that business rather than a separate submission for every address. Foreign property income is treated separately, and different businesses or income sources may create separate update obligations.

Quarterly deadlines for 2026–27

For a landlord using the standard tax-year update periods, the deadlines are:

A calendar-quarter election may be available, using periods ending 30 June, 30 September, 31 December and 31 March. The submission deadlines remain 7 August, 7 November, 7 February and 7 May.

What if the first quarterly deadline was missed?

The first 2026–27 quarterly update was due on 7 August 2026. If it was missed, the landlord should bring the digital records up to date and send the required information as soon as possible rather than waiting until the annual tax return.

HMRC has stated that it will not apply penalty points for late quarterly updates during the first mandatory year, 2026–27. This easement does not remove the obligation to submit the updates, and normal penalties can still apply to a late tax return or late tax payment.

Annual tax return and payment dates

For the 2026–27 tax year:

•  The tax year ends on 5 April 2027

•  The fourth quarterly update is due by 7 May 2027

•  The annual tax return is due by 31 January 2028

•  Any balancing payment is normally due by 31 January 2028

Payments on account may also be due on 31 January and 31 July, depending on the taxpayer’s circumstances. Quarterly updates do not create quarterly tax-payment dates.

What penalties apply?

MTD uses a points-based system for late submissions. Generally, a late quarterly update can create a penalty point. For quarterly obligations, a £200 financial penalty is normally charged when the taxpayer reaches four points, with further £200 penalties possible for additional missed obligations while at the threshold.

However, HMRC will not apply penalty points for late quarterly updates for taxpayers who entered mandatory MTD on 6 April 2026 during their first year, 2026–27.

Separate penalties can apply for late annual tax returns and late payment of tax. Interest may also be charged on tax paid late.

Who may be exempt?

Some people are automatically exempt, while others can apply to HMRC for an exemption. Circumstances can include:

•  Qualifying income of £20,000 or less

•  Not having a National Insurance number before the relevant tax year begins

•  Acting only as a personal representative of someone who has died

•  Digital exclusion because of age, disability, remoteness, religion or another qualifying reason

•  Certain insolvency circumstances

An exemption is not automatic merely because a taxpayer is uncomfortable with software or prefers paper records. Where an application is required, HMRC will consider the person’s circumstances. Continue meeting existing tax obligations while waiting for a decision.

Preparing for Making Tax Digital

Landlords should:

•  Check the gross property and self-employment income on the relevant tax return

•  Confirm the correct ownership and income split for jointly owned property

•  Choose compatible software

•  Set up each relevant property business or income source correctly

•  Establish a regular process for capturing income and expenses

•  Keep supporting documents in an organised digital system

•  Authorise an accountant or tax agent if professional support is needed

Do not wait until the first deadline to organise the records. The main practical risk is not the software itself; it is incomplete or inconsistent bookkeeping throughout the year.

How Number One Accounting supports landlords

Number One Accounting can support landlords with:

•  Checking whether and when MTD applies

•  Reviewing qualifying income and jointly owned property income

•  Setting up compatible software and bookkeeping processes

•  Maintaining digital property records

•  Preparing and sending quarterly updates

•  Preparing and submitting the annual tax return

•  Helping correct incomplete or inaccurate property records

Frequently asked questions

Does every landlord need to use MTD?

No. The start date depends on the individual’s qualifying income and whether the other conditions are met. Some taxpayers are exempt.

Is the threshold based on rental profit?

No. It is based on gross qualifying income before expenses, not taxable profit.

Are employment income and pensions included?

No. They do not count towards qualifying income, although they may still need to appear in the annual tax return.

Do quarterly updates mean quarterly tax payments?

No. MTD changes record-keeping and reporting. It does not introduce a general quarterly Income Tax payment requirement.

Can an accountant manage MTD for a landlord?

Yes. An authorised agent can help maintain records, send quarterly updates and prepare the annual tax return. The landlord remains responsible for providing complete and accurate information.

Do I still submit a tax return?

Yes. You must still submit one annual tax return. Under MTD, it is submitted using compatible software.

This article provides general information only and does not constitute personal tax, accounting or legal advice. Individual circumstances and HMRC requirements may vary. Information reviewed on 20 September 2026.