Making Tax Digital for Landlords: Deadlines, Thresholds & Setup

Making Tax Digital for landlords is the biggest change to how rental income is reported in years. From 6 April 2026, landlords with qualifying income over £50,000 need to keep digital records and send quarterly updates to HMRC using MTD-compatible software — replacing the single annual Self Assessment return with more frequent reporting.

This guide covers who is affected, the income thresholds, quarterly update deadlines, software requirements, and how to prepare your property business.

Who Needs to Use Making Tax Digital?

Making Tax Digital (MTD) for Income Tax applies to sole traders and landlords registered for Self Assessment. It's being introduced in phases based on your qualifying income — the total gross income (before expenses) from self-employment and property combined.

Phase	Start Date	Qualifying Income Threshold
1	6 April 2026	Over £50,000
2	6 April 2027	Over £30,000
3	6 April 2028 (planned)	Over £20,000

The Phase 3 threshold is subject to legislation being introduced. Phases 1 and 2 are confirmed.

What Counts as Qualifying Income?

Qualifying income is your total gross income from:

• UK property (rental income before expenses)
• Foreign property
• Self-employment

These are added together. If you earn £35,000 in rental income and £20,000 from self-employment, your qualifying income is £55,000 — over the £50,000 threshold for April 2026.

Important: This is gross income, not profit. Even if your expenses reduce your taxable profit significantly, it's the income figure that determines whether MTD applies to you.

Who Is Exempt?

Some landlords are exempt from MTD, including those who:

• Are digitally excluded (unable to use digital tools for reasons such as age, disability, or location)
• Have qualifying income below the current threshold
• Fall into specific categories listed on GOV.UK (such as certain non-resident landlords or those with other qualifying exemptions)

If you're exempt, you continue to file a Self Assessment return as normal.

How MTD Quarterly Updates Work for Landlords

Under MTD for Income Tax, landlords submit four quarterly updates per year instead of one annual return. Each update covers three months and includes category totals for your rental income and expenses.

What You Submit

Quarterly updates include:

• Total rental income received during the period
• Total expenses by category (repairs, insurance, agent fees, etc.)
• Any corrections to earlier periods in the same tax year

You submit category totals — not individual transaction details. HMRC does not see every receipt or invoice, just the summary figures.

You need to submit updates even if you had no income or expenses during the period.

Update Periods and Deadlines

You choose between standard periods (aligned with the tax year) or calendar periods (aligned with month-ends):

Standard periods (6 April to 5 April):

Period	Deadline
6 April – 5 July	7 August
6 July – 5 October	7 November
6 October – 5 January	7 February
6 January – 5 April	7 May

Calendar periods (1 April to 31 March):

Period	Deadline
1 April – 30 June	7 August
1 July – 30 September	7 November
1 October – 31 December	7 February
1 January – 31 March	7 May

Choose your period type in your software before your first update. You can switch to a different type, but only from the start of the next tax year.

Final Declaration and Year-End Tax Return

After your four quarterly updates, you still file a final declaration (similar to the current Self Assessment return) by 31 January following the end of the tax year. This is where you:

• Confirm your figures are correct
• Add other income (dividends, savings, pensions)
• Claim any tax reliefs
• Receive your final tax calculation

The payment dates remain the same — 31 January and 31 July — as explained in our guide on payments on account for landlords.

What MTD-Compatible Software Do Landlords Need?

MTD-compatible software is any HMRC-recognised application that can:

• Create and store digital records of income and expenses
• Submit quarterly updates to HMRC
• File your final declaration

HMRC maintains a list of compatible software on GOV.UK. Options range from free tools to commercial accounting packages like FreeAgent, Xero, and QuickBooks.

Can Landlords Still Use a Spreadsheet for MTD?

Yes, but with a catch. You can continue recording transactions in a spreadsheet, but you'll need bridging software that connects your spreadsheet to HMRC's systems for submitting updates. The spreadsheet alone isn't sufficient.

If you're already using accounting software, check whether your provider offers MTD compatibility — many have added this feature.

How to Sign Up for Making Tax Digital as a Landlord

You sign up for MTD for Income Tax through your HMRC online account. HMRC has been writing to landlords who need to join, so you may have already received a letter.

Steps to sign up:

1. Check if your qualifying income puts you above the threshold
2. Choose your MTD-compatible software
3. Go to Sign up for Making Tax Digital for Income Tax on GOV.UK
4. Sign in with your Government Gateway credentials
5. Follow the on-screen steps to link your software

Timing: You don't need to sign up until after you've submitted your first Self Assessment return, but signing up early gives you time to get comfortable with the software before quarterly reporting begins.

Digital Record Keeping for Rental Income

MTD requires you to keep digital records of all rental income and expenses. This means recording transactions in compatible software (or a spreadsheet with bridging software) rather than on paper.

For each transaction, you need to record:

• Date
• Amount
• Category (rent received, repairs, insurance, etc.)

If you already keep digital records — even a basic spreadsheet — you're partway there. Our landlord tax records checklist covers what records to keep in detail.

Paper backup: You can still keep paper receipts and documents as backup. HMRC's requirement is that your primary records are digital and held in compatible software.

MTD Penalties and the First-Year Grace Period

HMRC has introduced a grace period for landlords joining MTD in April 2026 to allow time to adjust to quarterly reporting:

• No penalty points for late quarterly updates during the first tax year (2026/27)
• Penalty points will apply for late tax returns (the final declaration)

After the grace period, a new points-based penalty system applies:

1. You receive one penalty point for each late quarterly update
2. A £200 penalty is charged when you reach 4 points
3. Points can be removed by submitting on time going forward

Under this system, occasional late submissions don't trigger an immediate fine — unlike the current fixed penalty approach.

What Stays the Same for Landlord Tax Payments

MTD changes how you report rental income, but several things stay the same:

• Payment dates — tax is still due on 31 January and 31 July
• Payments on account — the two-instalment system continues
• Allowable expenses — the same expenses remain deductible
• Tax rates — your rental profit is still taxed at your marginal rate
• Property allowance — the £1,000 tax-free threshold still applies (2025/26)

Preparing for MTD: A Checklist

If you're a landlord with qualifying income over £50,000, here's what to do before 6 April 2026:

1. Check your qualifying income — add up gross rental income plus any self-employment income for 2024/25
2. Choose software — browse HMRC's compatible software list and pick one that suits your property business
3. Set up digital records — start recording income and expenses digitally if you haven't already
4. Sign up on GOV.UK — register for MTD through your HMRC online account
5. Choose your update periods — standard (tax year) or calendar (month-end)
6. Diarise the deadlines — mark the four quarterly update dates plus the 31 January final declaration

If your income is between £30,000 and £50,000, you have until April 2027 — but starting digital record keeping now will make the transition smoother.

Frequently Asked Questions

Do I need to use Making Tax Digital if I only have rental income?

Yes, if your gross rental income exceeds the threshold. MTD applies to all qualifying income from self-employment and property. Even if you have no self-employment income, rental income alone can trigger the requirement.

Will MTD mean I pay more tax?

No. MTD changes how you report income, not how much tax you owe. Your tax calculation, allowable expenses, and rates remain the same. The quarterly updates give HMRC a more up-to-date picture, but they don't create additional tax.

Can I sign up voluntarily before I'm required to?

Yes. You can choose to sign up early even if your income is below the current threshold. Some landlords prefer to start early to familiarise themselves with the software and quarterly process before it becomes mandatory.

What if I have multiple rental properties?

All your UK properties are treated as a single property business. You submit one set of quarterly updates covering the combined income and expenses across all properties — you don't need separate submissions for each property.

Does Making Tax Digital apply to joint landlords?

Each person's share of the property income counts towards their own qualifying income threshold. If you jointly own a rental property, each owner assesses their share separately. For more on how rental income is assessed, see our guide on when rental income is taxable.

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This guide is for informational purposes only and does not constitute tax, legal, or financial advice. Tax rules change frequently. Always verify current requirements on GOV.UK or consult a qualified accountant for your specific situation.

Official Sources

• Making Tax Digital for Income Tax for sole traders and landlords: step by step — GOV.UK
• Find out if and when you need to use Making Tax Digital for Income Tax — GOV.UK
• Send quarterly updates — GOV.UK
• Sign up for Making Tax Digital for Income Tax — GOV.UK
• Find compatible software — GOV.UK