Making Tax Digital is officially here – and for thousands of landlords, the way rental income is reported to HMRC has already changed.

Since April 2026, landlords with qualifying income over £50,000 a year have been required to keep digital records and submit quarterly updates to HMRC using compatible software. And even if you’re not quite at that threshold, it’s worth getting familiar with the new system now: the threshold drops to £30,000 from April 2027 and £20,000 from April 2028.

So, what does that actually mean for you? We’ve broken it down in plain English – no tax jargon overload to contend with over your cornflakes…

What on earth is Making Tax Digital?

Making Tax Digital (MTD) is HMRC’s move towards a more digital tax system. For landlords, Making Tax Digital for Income Tax means moving away from relying solely on the traditional annual Self Assessment process and instead keeping digital records and sending HMRC a summary of your income and expenses each quarter.

At the end of the tax year, you’ll also submit a final declaration to confirm your figures, make any necessary adjustments, claim relevant reliefs and allowances, and establish your final tax position.

If you’ve already experienced the joys of MTD for VAT, the idea may feel familiar – just with a rental income twist.

Standard Quarterly Reporting Periods and Deadlines

6 April to 5 July – Submission deadline: 7 August
6 July to 5 October – Submission deadline: 7 November
6 October to 5 January – Submission deadline: 7 February
6 January to 5 April – Submission deadline: 7 May
Final Declaration Deadline: 31 January – Submit your final MTD declaration to confirm total income, claim any allowances or reliefs, and pay any tax due.

Who needs to worry (and when)?

Okay, heads up as here comes the lowdown:

April 2026: If you’re a landlord (or self-employed) earning over £50,000 a year, MTD becomes your new best friend.

April 2027: The threshold drops to £30,000, roping in even more people.

Eventually: Landlords earning more than £20,000 will be included, but the date’s still TBC.

Important: This includes income from both rental properties and self-employment. So if you’ve got a couple of BTLs and a freelance side hustle, those figures are combined.

From Annual Returns to Quarterly Chores

Yes, it’s true-the once-a-year tax return will soon be a quarterly affair. Under MTD, landlords will need to:

1. Keep digital records of income and expenses using HMRC-recognised software

2. Submit quarterly updates to HMRC (no more panicked January 31st marathons)

3. File a Final Declaration after the end of the tax year

Think of it like Netflix-just more paperwork and less binge-watching.

Can’t I just use my beloved spreadsheet?

Sadly, no. You’ll need to use software that’s officially recognised by HMRC. There are plenty of landlord-friendly options out there, from budget apps to full-on accounting platforms. If Excel has been your trusty sidekick until now, it might be time to upgrade. Sorry spreadsheet lovers.

Do I need to sign up if I already do Making Tax Digital for VAT?

Oh, hello there acronym party for one. In short, yes. MTD for VAT and MTD for Income Tax are separate beasts. If you’re VAT-registered and a landlord, you’ll need to sign up for both schemes individually.

Property sales? Not part of the party

Selling a rental? The proceeds don’t count toward your MTD income threshold. Instead, you’ll handle that under Capital Gains Tax, which still requires separate reporting (within 60 days of completion, to be exact).

How MTD works for joint property owners

Even if you share ownership of a property, you’ll each need to report your share of the income quarterly. That said, you can choose to submit shared expenses annually instead of every quarter. A small win for your inbox.

What do I need to send to HMRC?

Brace yourself for a few extra to-dos:

Quarterly updates – Your rental income and expenses, submitted via your chosen software

Final Declaration – Due by 31 January following the end of the tax year; includes any reliefs or additional income you haven’t reported yet

Here’s how to get MTD-ready:

Get the right software – Start shopping around now
Digitise your records – No more shoeboxes full of receipts
Stay on top of your numbers – Set monthly reminders if needed
Talk to a pro – An accountant or bookkeeper can help you avoid nasty surprises

Top tip: Choose someone who actually understands landlord tax rules-not just any old spreadsheet wizard.

Voluntary sign-up: worth doing?

Honestly? Yes. Signing up early means you get to grips with the system before it becomes mandatory. Plus, if you’re already using cloud software to manage your rentals, the switch might be smoother than you think. Just make sure your software is HMRC-approved, and you meet the criteria for voluntary sign-up. (Need help with that? We can point you in the right direction.)

How Does It Apply If I’m a Limited Company?

If you operate as a limited company, nothing changes for you under MTD for Income Tax. You’ll continue submitting your usual company tax returns and accounts to HMRC and Companies House.

And finally… not everyone needs to join

There are a few exceptions:

1. If your income is below the threshold

2. If you receive money from things like REIT shares, which don’t count

3. If you have a genuine exemption, like poor digital access or a disability

But for most landlords, MTD is the future-and it’s getting closer.

The bottom line for landlords

Yes, Making Tax Digital means change. But with the right tools, advice, and a bit of prep, it doesn’t have to be a nightmare. Here at Davies and Davies, we work with landlords across North London every day, and we’re here to help you stay one step ahead-whether that’s choosing the right software, finding a savvy accountant, or just making sense of your obligations. Want to future-proof your property business and keep things tax-compliant? Get in touch with our team today. Or pop by the office – we’re always happy to chat tax (and tea).

 

Contact us:

mark@daviesdavies.co.uk – Sales Director (contact for sales, lettings and new homes)

katrina@daviesdavies.co.uk – Director of Property & Block Management (contact for property and block management)

Davies & Davies Estate Agents, 85 Stroud Green Road, London, N4 3EG

Article & images by Barefaced Studios

You might also want to read other useful blog articles by clicking here.

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