Making Tax Digital for landlords: who's in, when, and what to do

Are you in it yet?

Making Tax Digital for Income Tax started for the first group of landlords on 6 April 2026. If your gross rental income, plus anything you earn from self-employment, came to more than £50,000 on your 2024–25 tax return, you’re already in it. Everyone else follows on a set timetable:

• Gross income over £50,000 — from April 2026 (already live).
• Over £30,000 — from April 2027.
• Over £20,000 — from April 2028.

Those bands are now set in law, and £20,000 is the floor; there’s no announced band below it. HMRC checks the relevant year’s tax return and writes to anyone affected, so you shouldn’t have to work it out blind. Know your date anyway — that’s when your records have to be ready, not a month later.

“Income” means rent, not profit

The threshold is your grossincome: the rent before you take off a single expense, not your taxable profit. Plenty of landlords get this wrong. Someone pulling in £55,000 of rent but keeping only £40,000 after the mortgage and repairs is still measured on the £55,000, and still in. Property income on its own counts; you don’t need any self-employment alongside it. Wages, a pension, dividends or savings interest don’t go towards the figure.

What you actually have to do

Three things, in place of the single yearly return you file now:

• Keep digital records of your rental income and expenses, in software, as you go, rather than a shoebox reconciled every January.
• Send a quarterly update to HMRC four times a year, straight from that software. The deadlines are the 7th of August, November, February and May.
• File a final declaration after the tax year, by 31 January, where you finalise the figures, make any adjustments and claim your reliefs. It replaces the Self Assessment return for your property income.

For the first £50,000 group, the opening quarter runs 6 April to 5 July 2026, with its update due by 7 August 2026.

You can’t just use the HMRC website any more

This is the part that changes how you file. Today you log into HMRC and type your figures into a box. Under Making Tax Digital you can’t. The quarterly updates and the final declaration have to go through HMRC-recognised, compatible software. You can still keep your records in a spreadsheet if you like, but it has to feed “bridging” software that does the digital submission; no copying numbers across by hand. The mainstream tools landlords already use, Xero, FreeAgent, Sage and QuickBooks, are on HMRC’s recognised list. Just check the specific product covers Income Tax, not only VAT.

Penalties, and the soft first year

Late submissions run on points now: a point each time you miss a deadline, a £200 penalty once you hit four points, then £200 for every further slip. The reprieve is that 2026/27 is a soft-landing year. HMRC won’t charge late-submission penalties on missed quarterly updates in that first year. Late payment is separate and applies from the start: nothing in the first 15 days, then 3% of the tax owed, with more added after 30 days.

If you’re under the threshold

If your gross rents are £20,000 or less you’re outside it for now, though you can sign up voluntarily if you want to start early. There are also exemptions for people who genuinely can’t work digitally on grounds of age, disability, where they live or religion. You have to apply for those, though; they aren’t automatic.

The short version

• Add up your gross rents, plus any self-employment. That’s the figure that decides it.
• Check your band: £50k now, £30k from 2027, £20k from 2028.
• Get MTD-compatible software, or bridging software for a spreadsheet.
• Keep digital records from the first day of the tax year.
• Send quarterly updates by 7 August, 7 November, 7 February and 7 May.
• File the final declaration by 31 January.

Common questions