Making Tax Digital for Income Tax stopped being a future problem on 6 April 2026. If your gross property and self-employment income for the 2024 to 2025 tax year came to more than £50,000, you are already in it — keeping digital records, using compatible software and filing quarterly updates instead of one annual return.
The first quarterly deadline under the new regime fell on 7 August 2026. If you missed it, you are not alone, and it is fixable. If you are below the threshold today, your turn comes in April 2027 or April 2028.
This guide sets out exactly what your landlord responsibilities for Making Tax Digital are: who has to join and when, what a digital record actually means, the four quarterly deadlines, the exemptions, and the penalties for getting it wrong.
Key takeaways
- MTD for Income Tax applies from 6 April 2026 to landlords with qualifying income over £50,000, from April 2027 above £30,000, and from April 2028 above £20,000.
- Qualifying income is gross rent and trading income before expenses — not your profit. That surprises a lot of landlords with mortgages.
- You must keep digital records, use HMRC-compatible software, file four quarterly updates and then a final declaration by 31 January.
- Quarterly update deadlines are 7 August, 7 November, 7 February and 7 May.
- Jointly owned property is assessed on each owner’s share, so spouses can fall into MTD in different years.
- Property held in a limited company is outside MTD for Income Tax entirely — companies pay corporation tax.
What Making Tax Digital for Income Tax actually is
MTD for Income Tax (sometimes written MTD ITSA) replaces the single annual Self Assessment return with a rolling, software-based process. Instead of pulling a shoebox of receipts together each January, you record income and expenses digitally as you go and send HMRC a summary four times a year, followed by one year-end declaration that finalises the figures.
Two things it is not. It is not a new tax, and it does not change when you pay — payment dates stay at 31 January and 31 July. What changes is the record-keeping and the reporting rhythm.
Do you have to join? The qualifying income test
You are in scope if you are an individual registered for Self Assessment, you receive income from property or self-employment (or both), and your qualifying income exceeds the threshold for that phase. HMRC looks at the tax year two years before the start date — so the April 2026 cohort was set by the 2024 to 2025 return.
It is gross income, not profit
This is the point that catches most landlords out. Qualifying income is the rent you receive before deducting mortgage interest, agent fees, insurance, repairs or anything else. A landlord with three properties bringing in £20,000 each has £60,000 of qualifying income and is in MTD from April 2026 — even if the profit after finance costs is a fraction of that.
If you also have a side trade, the two are added together. Someone with £35,000 of rent and £18,000 of freelance income has £53,000 of qualifying income.
What does not count
Employment income taxed under PAYE, pensions, dividends, bank interest and capital gains on a property sale are all outside the qualifying income calculation. A landlord with a £90,000 salary and £22,000 of rent is not in the first phase, because only the rent counts.
Jointly owned property
Each owner is assessed on their own share of the gross rent. A couple holding a portfolio producing £70,000 of rent split 50/50 each have £35,000 of qualifying income — neither joins in 2026, both join in 2027. Split 25/75, one joins in 2027 and the other joined in 2026. Married couples and civil partners are treated as 50/50 by default unless a Form 17 declaration says otherwise.
There is a helpful easement for jointly owned property: you do not have to include expenses in your quarterly updates for the jointly held business, provided the figures are finalised at year end.
Landlords who are outside MTD altogether
If you hold property through a limited company, MTD for Income Tax does not apply — the company files a corporation tax return instead. That does not automatically make incorporation the right answer, and our guide to using limited companies for buy-to-let sets out the trade-offs.
The deadlines you now have
Quarterly updates are cumulative: each one restates the year to date rather than just the quarter, so an error in Q1 can be corrected in Q2 without an amendment.
| Update | Period covered | Filing deadline |
|---|---|---|
| Quarter 1 | 6 April – 5 July | 7 August |
| Quarter 2 | 6 April – 5 October | 7 November |
| Quarter 3 | 6 April – 5 January | 7 February |
| Quarter 4 | 6 April – 5 April | 7 May |
| Final declaration | Whole tax year | 31 January following |
Most software lets you elect for calendar quarters instead (1 April to 30 June, and so on), which is tidier if your bookkeeping runs to month ends. The filing dates stay the same.
The final declaration replaces the old Self Assessment return. It is where you add everything MTD does not cover — employment income, dividends, pension contributions, reliefs — and confirm the whole picture. Tax remains payable by 31 January, with payments on account on 31 January and 31 July as before.
Your five core responsibilities
What MTD requires of you, in order
Gross rent plus gross trading income for the relevant tax year. Check it against the threshold for your phase.
It must connect to HMRC and be on the approved list. A spreadsheet works only with bridging software attached.
Signing up is a separate step from buying software, and an agent can do it for you.
Each item of income and expense recorded digitally, with a digital link from record to submission.
7 August, 7 November, 7 February, 7 May — then finalise by 31 January.
What counts as a digital record
A digital record is each individual transaction — date, amount and category — captured in software, not a monthly total typed in from a bank statement summary. The chain from record to submission has to be digital too, which is what HMRC means by a “digital link”. Copying a figure by hand from one system into another breaks it.
In practice, for a landlord that means:
- every rent receipt, per property, per tenant;
- every expense, categorised — and mortgage interest kept separate, because it is relieved as a basic-rate tax reducer rather than deducted;
- agent statements broken down to their component parts, not entered as one net figure;
- records retained for the standard retention period — five years after the 31 January filing deadline for the relevant year.
Landlords with turnover below the VAT threshold can use simplified “three-line accounts” in quarterly updates — income, expenses, profit — but mortgage interest still has to be reported separately. If you already track costs properly, this is a small step. If you do not, start with our list of the buy-to-let costs landlords routinely forget to claim.
Choosing software
HMRC publishes a list of compatible products, and they fall into three broad groups:
Property-specific software
✓ Built around properties and tenancies
✓ Handles per-property reporting cleanly
✗ Less useful if you also run a trade
General accounting software
✓ Bank feeds and receipt capture
✓ Your accountant already knows it
✗ Needs setting up properly per property
Spreadsheet plus bridging
✓ Cheapest if your sheet already works
✗ Digital links must be unbroken
✗ More manual, more room for error
Whichever you pick, check it is on HMRC’s approved list before you pay for a year. If you are weighing up a full accounting package, our walkthrough of using Xero as a UK residential landlord covers how to structure the chart of accounts per property.
Exemptions and exclusions
Some people are automatically outside MTD, including trustees, personal representatives of a deceased person, Lloyd’s underwriters, and individuals without a National Insurance number.
Beyond that, you can apply to HMRC for an exemption on the basis that it is not reasonably practicable for you to use digital tools — because of age, disability, location (no reliable broadband) or religious belief. This is the “digitally excluded” route. It is not automatic, you have to ask, and if you are granted it you still file a Self Assessment return in the usual way.
Do not assume you qualify because MTD is inconvenient. Apply early if you think it applies to you, and keep the correspondence.
Penalties for getting it wrong
MTD brings a points-based late submission regime. Each missed deadline earns a point; once you reach the threshold for your filing frequency — four points for quarterly filers — a £200 penalty is charged, and again for each subsequent late submission while you are at the threshold. Points sit on your record for two years before expiring.
HMRC has confirmed a soft landing in the first year of mandation, under which penalty points are not issued for late quarterly updates while landlords adjust. That concession does not extend to the final declaration, and it does not cover paying late.
Late payment penalties escalate with time: a first charge once tax is more than 15 days overdue, a second at 30 days, and then a further amount accruing daily at an annual rate from day 31. HMRC changed these rates recently, so check the current percentages on GOV.UK rather than relying on a figure you read last year. Interest runs on top.
Common mistakes landlords are making
- Testing the threshold against profit. It is gross income. Mortgage interest does not reduce it.
- Buying software but not signing up. They are two separate actions and only one of them tells HMRC.
- Entering agent statements as a single net figure. Gross rent in, agent fee out. Netting them off understates income and breaks the digital record.
- Forgetting the second property business. UK property and furnished holiday or overseas property are reported separately.
- Assuming an accountant handles it silently. Agents can file, but they need the records in the software during the quarter, not in January.
- Ignoring it because you are under £50,000. The £30,000 phase is set by your 2025 to 2026 figures, which are already in the past.
What to do next
Work out your gross property income for the relevant tax year and find out which phase you are in. If you are already mandated, check your quarterly updates are filed and your records are genuinely digital. If you join in 2027 or 2028, start recording transactions properly now — a year of clean data makes the first quarter painless.
HMRC’s own guidance is the definitive source: check whether you are eligible and when you must join and the list of compatible software. The NRLA’s MTD resource is a good landlord-focused summary. For the day-to-day side of collecting the income you will be reporting, see our guide to collecting rent from UK tenants.
Frequently asked questions
Does Making Tax Digital apply to all landlords?
No. It applies to individuals registered for Self Assessment whose qualifying income exceeds the threshold for the relevant phase — over £50,000 from April 2026, over £30,000 from April 2027 and over £20,000 from April 2028. Property held in a company is outside the regime.
Is the threshold based on rent or profit?
Gross rent, before any expenses or mortgage interest. Combined with any gross self-employment income. This is why landlords with modest profits can still be in the first phase.
When are the quarterly updates due?
7 August, 7 November, 7 February and 7 May, covering cumulative periods from 6 April. A final declaration is then due by 31 January after the tax year ends.
Can I still use a spreadsheet?
Yes, provided it is connected to HMRC-compatible bridging software and the digital link between your records and the submission is unbroken. Retyping figures between systems is not permitted.
What if my properties are jointly owned?
Each owner is tested on their own share of the gross rent, so joint owners can be mandated in different years. Married couples and civil partners are treated as 50/50 unless a Form 17 declaration is in place.
Can I get an exemption?
Some people are automatically exempt, including trustees and personal representatives. Others can apply to HMRC on digital exclusion grounds — age, disability, location or religious belief. It is an application, not an automatic right, and you still file a Self Assessment return if granted.
Does MTD change when I pay my tax?
No. Payment dates remain 31 January and 31 July, including payments on account. Only the record-keeping and reporting change.
Written by the Landlords Portal editorial team. This article is general information, not tax or legal advice, and tax treatment depends on your individual circumstances. Check current guidance on GOV.UK or speak to a qualified accountant before acting.
