Making Tax Digital Rules for Landlords

Making Tax Digital for landlords is coming, and all property investors must understand how to comply with the rules to avoid significant penalties.

The government is overhauling the records that landlords should keep and setting new tax payment deadlines with Making Tax Digital (MTD).

Until now, MTD has existed as a policy paper, but from April 2026, the initiative will start to roll out for landlords earning rent of more than £50,000 a year.

As the net widens, some 900,000 landlords are expected to come under MTD by April 2028.

What is MTD?

MTD is an online platform for reporting financial information to HM Revenue and Customs. The aim is to allow letting businesses and landlords to keep accurate digital records and file tax returns. MTD requires landlords to keep financial records and complete tax returns on compatible software.

HMRC announced MTD in 2015 and has run pilot schemes for volunteer landlords since then, but from April 2026, the roll-out of MTD officially starts.

Reporting is quarterly rather than once a year, like self-assessment. The software will punch out a real-time tax estimate based on the information keyed in. At the end of the year, a final tax demand is produced, which replaces the need for a self-assessment return.

Some tax experts and accountants argue that MTD is more a tool to help government cash flow than an aid to help taxpayers.

When should landlords sign up for MTD?

When landlords should start using MTD depends on several factors:

• If they are registered for self-assessment
• If they earn income from property and/or self-employment
• How much they earn gross as MTD qualifying income

Calculating qualifying MTD income

The deadline dates for enrolling in MTD for income tax are:

• April 2026 - landlords earning above £50,000 from property or property and sole trader income will need to follow the MTD for income tax rules
• April 2027 - landlords earning £30,000 or more must join MTD
• April 2028 - landlords earning more than £20,000 become subject to MTD

HMRC has an online tool that runs through the process to help taxpayers determine if they qualify and when they should join MTD.

Finding MTD software

Most of the usual big-brand software houses are gearing up their online platforms to cover MTD.

However, landlords must make quarterly returns to HMRC and a final end-of-year filing, like self-assessment.

Check the software carefully; some can handle both tasks, while others are designed for just one.

HMRC helpfully provides a list of MTD for Income Tax compatible software

Most are paid packages, although Freeagent is true to its name and comes for free.

Some landlords can use their spreadsheets if they can connect to HMRC through a software bridge. Bridge connectors are listed with other MTD software under the link above.

Tech-savvy landlords should have no problems with MTD, but those less able can work with an accountant or tax adviser.