Making Tax Digital for Income Tax: What Landlords Need To Be Doing Now

MTD Has Started For Some Landlords

Making Tax Digital for Income Tax is no longer a future change. It started on 6 April 2026 for some landlords and sole traders.

HMRC says landlords need to use it now if their 2024 to 2025 tax return showed qualifying income of more than £50,000. Qualifying income means your gross property income plus any sole trader turnover, before expenses.

Important point: this is not based on profit. It is based on total qualifying income before costs are deducted.

Who Needs To Act Now

As of May 2026, the landlords who need to be preparing or already operating under MTD are those who:

are individuals registered for Self Assessment
receive income from property, self-employment, or both
had qualifying income above £50,000 on their 2024 to 2025 tax return

Landlords below that level are not all in yet, but the next stages are already set. HMRC says MTD will apply from 6 April 2027 if qualifying income for 2025 to 2026 was over £30,000, and from 6 April 2028 if qualifying income for 2026 to 2027 was over £20,000.

Why landlords get caught out: many people think only full-time investors are affected, but the threshold looks at gross property income and can also include sole trader turnover if you have both.

What Stays The Same And What Changes

MTD does not replace the annual tax return completely. You still need to submit one tax return each year and pay tax by 31 January after the end of the tax year.

What changes is the process in between. Landlords in MTD now need to:

use compatible software
keep digital records of property income and expenses
send quarterly updates to HMRC every 3 months
use software to complete and submit the final tax return

HMRC describes quarterly updates as summaries, not tax returns, but they still become part of the new compliance routine.

What Landlords Need To Be Doing Now

The practical response is a short preparation checklist.

Check if you are in now using your latest filed tax return and HMRC's MTD guidance or checker.
Choose software before you sign up. If you already use spreadsheets, you may be able to keep them, but you will still need bridging software that connects them to HMRC.
Start digital record keeping immediately from the correct start date for your update period.
Make sure your income and expense entries include the amount, date and category so the quarterly updates can be produced correctly.
Decide who is handling this if you use an accountant or tax agent, because the software and authorisations need to be aligned.
Review whether an exemption may apply if you are digitally excluded or have another valid reason.

The First Deadlines Are Closer Than They Look

For landlords using standard update periods, HMRC says digital records need to start from 6 April 2026. For calendar update periods, the record-keeping start date is 1 April 2026.

The first quarterly update deadlines in the first year are:

7 August 2026
7 November 2026
7 February 2027
7 May 2027

After that, the annual tax return for the 2026 to 2027 tax year, and the tax payment itself, are due by 31 January 2028.

One helpful detail: HMRC says it will not apply penalty points for late quarterly updates during the 2026 to 2027 tax year, but the updates still need to be sent before the final return can be completed.

Do Not Leave The Software Decision Too Late

For many landlords, the real blocker is not understanding the rule. It is leaving the software choice until the first update is almost due.

HMRC's guidance is clear that software should be chosen before signing up. That gives you time to authorise it properly, check your accounting period and make sure your records are flowing into the right categories.

If you have multiple properties, joint ownership arrangements or an agent helping with compliance, it is even more important to get the setup right early.

Our View

For landlords over the threshold, MTD is now an operational issue rather than a future tax announcement. The ones who stay calm are usually the ones who deal with three things early: threshold check, software choice and routine record keeping.

If you are below the first threshold, that does not mean ignore it. It means use 2026 to clean up records before the lower thresholds bring more landlords in.

If you want help getting your rental paperwork and income records organised before speaking to your accountant, Newcastle Residential can help with the property side.

Request Landlord Support

Sources used

Find out if and when you need to use Making Tax Digital for Income Tax — GOV.UK, HMRC, updated 26 March 2026.
Use Making Tax Digital for Income Tax: Before you use this guide — GOV.UK, HMRC, updated 24 April 2026.
Choose the right software for Making Tax Digital for Income Tax — GOV.UK, HMRC, updated 2 April 2026.
Apply for an exemption from Making Tax Digital for Income Tax — GOV.UK, HMRC, updated 15 April 2026.

This article is for general information only and reflects HMRC guidance reviewed on 5 May 2026. It is not tax or legal advice. Landlords should check the latest official guidance and take advice on their own circumstances where needed.