Making Tax Digital for Landlords: It's Here — What You Need to Know Now
Apr 7th, 2026
Making Tax Digital for Landlords: It's Here — What You Need to Know Now
If you're a landlord and you've been putting off getting to grips with Making Tax Digital – well, I’m afraid your time is up! Or at least, it is if you are earning more than £50,000 per year – so even now, things aren’t quite black and white.
Nevertheless, from this month, April 2026, the rules are in force for the first wave of landlords, and the rest will follow not far behind.
Whether you've got a single buy-to-let or a large portfolio, the way you manage and report your rental income is changing. We published an article on this last year, as a still seemingly distant ‘heads-up’; now, we think it’s time to post a reminder – because for landlords earning over £50,000 in gross income, MTD is no longer something on the horizon; it's now a legal obligation.
That said, although it's a change to the status quo, there's no need for panic. Here's everything you need to know.
What is Making Tax Digital (MTD)?
Making Tax Digital is HMRC's plan to digitise the UK's tax system. The goal is to make tax reporting easier, more accurate, and (eventually) entirely paperless.
Instead of filing one complete tax return at the end of the year, landlords and other self-assessment taxpayers will now submit quarterly digital updates to HMRC using MTD-compatible software. You will also need to keep digital records of income and expenses, ideally using proper accounting software.
HMRC's view is that small, regular reporting is better than one annual rush. For landlords, it means a transition from the old "one deadline (and potentially lots of receipts in a shoebox)" model to something more frequent and proactive.
Who Does MTD Apply To?
This is really a change for sole trader landlords, rather than those who let through a limited company. For sole traders, Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is the part to pay attention to.
It applies to UK landlords of residential or commercial property, or furnished holiday lets. The rollout timeline is as follows:
For those of you earning over £50,000 gross income per year, MTD is now in effect for you from April 2026. This is not a drill! If you haven't already got your systems in place, do it now.
Earning between £30,000 and £50,000? Your start date is April 2027. Use this year wisely to get prepared.
Earning over £20,000 but under £30,000? Many sole trader landlords fall into this position, here. Your start date is April 2028, but early adoption will save you stress later.
Earning under £20,000? You're still not in scope yet, though HMRC is consulting on whether and when smaller landlords will be included.
Important: If you earn income from multiple sources (e.g., self-employment and property), those figures are combined when calculating your total income for MTD thresholds.
Remember: Income is assessed individually. Co-owners of a property only declare their own share of gross income, so many will fall into the lower threshold bracket.
What Does MTD Mean for Landlords in Practice?
Once MTD applies to you, you'll need to do your tax reporting digitally, four times a year: once a quarter, within a month of the quarter end, plus a final annual declaration.
This means:
Keeping digital records of all rental income and expenses
Using MTD-compatible software (Excel with a bridging tool can work, but accounting software is better, especially for any landlord with more than one or two properties)
Submitting quarterly updates to HMRC
Filing an annual final declaration (like your current tax return, but with most of the heavy lifting already done throughout the year)
The tax itself is still paid annually – it is just the reporting that becomes more frequent.
What Software Do You Need?
HMRC doesn't mandate a specific brand, but your chosen software must be able to record income and expenditure digitally, link directly to HMRC to submit updates, and maintain digital records in line with MTD rules.
Popular options include:
Hammock (a landlord-specific MTD reporting tool that has gained strong recommendations across the industry)
For landlords with more straightforward setups, Excel can still be used, but you'll need bridging software to make it MTD-compliant.
What About My Letting Agent?
If you work with a letting agent who offers property management, they may already be using accounting software and can manage digital record-keeping on your behalf. Here at Your Home Managed, we use Focus Micro Systems Rent + to record-keep for our South London Landlords.
However, even if your agent handles the record-keeping, you remain personally responsible for submitting your returns unless you've authorised an accountant or bookkeeper to act on your behalf with HMRC. It's worth clarifying with your agent or accountant now who's doing what – especially if MTD already applies to you.
Are There Any Benefits?
We get it; new systems and more admin never sounds like good news. But once you're set up, there are genuine advantages:
Better financial visibility: quarterly reporting keeps you on top of your finances year-round, not just at deadline time.
Fewer mistakes: automation reduces human error and missed deductions.
Less stress at tax time: most of the heavy lifting is done throughout the year.
More modern and sustainable: a fully digital system is more future-proof than piles of paper.
What If I Don't Comply?
For landlords already within scope (those earning over £50,000), non-compliance is not an option. Failing to meet MTD obligations can result in:
Penalties for late submissions
Fines for failing to keep proper digital records
In some cases, additional HMRC scrutiny
If you're not yet in scope, now is the time to get prepared – not the month before your deadline.
What Should Landlords Do Right Now?
Check your income threshold: Is your gross income over £50,000, £30,000, or £20,000? Work out your MTD start date, remembering that self-employed income counts too.
If April 2026 is your deadline, act immediately: Your first quarterly submission will be due within a month of the end of your first quarter. If you haven't chosen software or spoken to your accountant, do it today.
Choose your software: Look at tools that suit your portfolio size. Hammock is worth considering if you want something built specifically for landlords.
Speak to your letting agent or accountant: Ask what support they offer and clarify who is responsible for what.
Keep personal and property finances separate: A dedicated bank account for rental income makes digital record-keeping much simpler, especially as most software links directly to your bank.
Stay informed: HMRC continues to refine the rollout. Staying up to date means you can adapt quickly.
Final Thoughts: It's Here, But It's Manageable
Change is never fun, especially when tax and HMRC are involved. But MTD doesn't have to be overwhelming.
For landlords already in scope under the first wave, the focus now is on getting compliant as quickly as possible. For everyone else, the window to prepare calmly is still open… but time flies, and it won't stay open forever.
With the right tools and the right advice, most landlords will find that MTD is actually simpler and more efficient than the old system once it's up and running.
Need help navigating MTD? Whether you're a hands-on landlord or prefer a fully managed service, it's worth speaking to your letting agent or accountant now to get a plan in place.
Making Tax Digital is no longer coming… for many landlords, it's already here! But with the right preparation, it can become one of the simplest changes you make, and one that works in your favour long term