Making Tax Digital is coming for landlords and it starts 6 April 2026

From 6 April 2026, landlords (and sole traders) with qualifying income over £50,000 will be required to use Making Tax Digital (MTD) for Income Tax. HMRC says around 864,000 people are in scope for the first wave and should act now.

This isn’t “just a new website” or a small admin tweak. It’s a structural change to how you keep records and report property income to HMRC throughout the year — and it will catch out landlords who leave it until the last minute.

What MTD for Income Tax actually means (in plain English)

If you’re in scope, you’ll need to use MTD-recognised (compatible) software to:

• Keep digital records of your property income and expenses

• Send quarterly updates to HMRC (summaries based on your digital records)

• Submit your end-of-year return/final declaration (still due by 31 January after the tax year ends)

HMRC is very clear on one point many people misunderstand:

• Quarterly updates are not extra tax returns. They’re “light-touch” summaries of income and expenses sent during the year.

The big practical difference is that the “annual scramble” for receipts and spreadsheets becomes a year-round reporting cycle supported by software.

Am I in scope? The dates and thresholds landlords must know

MTD for Income Tax is being introduced in phases. Your start date is based on your total turnover (gross income) from self-employment and property combined, as shown on your latest tax return — before expenses.

Mandatory start dates (current plan)

• 6 April 2026 — if you earned £50,000+ in the 2024–25 tax year

• 6 April 2027 — if you earned £30,000+ in the 2025–26 tax year

• 6 April 2028 — if you earned £20,000+ in the 2026–27 tax year

Quarterly update deadlines (first wave example)

If you join from 6 April 2026, HMRC’s published due dates for quarterly updates are:

• Q1 due 7 Aug 2026

• Q2 due 7 Nov 2026

• Q3 due 7 Feb 2027

• Q4 due 7 May 2027

And the first MTD tax return/final submission for that group (covering 2026–27) is due 31 Jan 2028.

What you’ll need to do in practice (the landlord checklist)

1) Move from “records at year-end” to “records as you go”

Under MTD, you can’t rely on a once-a-year spreadsheet tidy-up. You need a system that captures, month by month:

Income

• Rent received (by property/tenancy)

• Other property income (e.g., service charges recharged, lease premiums where applicable)

Expenses

• Repairs and maintenance

• Letting agent fees

• Insurance

• Utilities you pay (if any)

• Finance costs / interest reporting (where relevant)

• Safety certificates and compliance costs

• Professional fees (accountant, legal, etc., where allowable)

Compatible software totals these into the categories HMRC expects, then generates the quarterly update.

Practical tip: The pain point is almost always bank and receipt discipline. If you currently mix personal and rental transactions in one account, now is the time to separate or at least tag transactions consistently.

2) Choose MTD-compatible software early

You’ll need recognised software (or a combination of software + bridging tools) that can:

• keep digital records, and

• submit quarterly updates to HMRC

HMRC also notes free software options are available for some users.

What to look for as a landlord

• Can it handle multiple properties easily?

• Does it import bank transactions automatically?

• Can it capture receipts (photo/email upload) and attach them to entries?

• Can your accountant access it (if you use one)?

• Can it split categories correctly (especially repairs vs improvements, and finance-related items)?

3) Get ready for the new “rhythm” of the tax year

A realistic workflow for many landlords will look like this:

Monthly

• Reconcile bank transactions

• Upload/attach receipts

• Check categories are correct

Quarterly

• Review the quarter totals

• Submit the quarterly update (the software sends it)

Year-end

• Do the end-of-year adjustments (accountant often helps here)

• Submit the final return/final declaration by 31 January

The upside: if you keep on top of it, HMRC’s vision is fewer errors and less panic in January. HMRC also says volunteers have already successfully submitted large numbers of quarterly updates via the testing programme.

4) If you use an accountant/agent, involve them now

If your current process is “drop a bag of statements once a year”, MTD will change how you work together. Agree early:

• who does the bookkeeping vs who does review

• who presses “submit”

• how corrections will be handled during the year

“What if I ignore it?” — what happens if landlords don’t comply

1) You may not be able to file the way you do today

MTD is a mandated method for people in scope: digital records + digital submissions via compatible software. Trying to stick to an old spreadsheet + manual Self Assessment approach risks missed deadlines and non-compliant submissions.

2) Late quarterly updates lead to penalty points (and then fines)

HMRC is moving to a points-based penalty system for late submissions:

• You get a penalty point for each late submission

• A £200 penalty is charged once you reach 4 points

Important transitional easement:

• For customers joining in April 2026, HMRC says you will not receive penalty points for late quarterly updates for the first 12 months.

That is not a free pass to ignore MTD — it’s a short runway. Once that 12-month period ends, the points system bites.

3) Missing the year-end final submission can still trigger the usual pain

Even under MTD, you still have an end-of-year submission due by 31 January after the tax year. If you’re late on that, you’re back in familiar territory: penalties and interest can apply under Self Assessment rules, and you risk compounding issues if you also have late payment.

4) Errors and “best guesses” become riskier

Quarterly reporting doesn’t remove the need for accuracy — it increases the number of reporting events. If you’re uploading messy transactions or miscategorising costs all year, you can expect:

• more corrections later (time + accountant fees), and

• a higher risk of inaccuracies if things are left unreviewed until year-end.

Common landlord “gotchas” we expect to see in 2026

• You’re over the threshold and don’t realise it because you focus on profit, not gross income. MTD thresholds use turnover/gross (before expenses).

• Multiple properties + mixed personal spending makes quarterly updates stressful without clean transaction feeds.

• Late records: if you only reconcile once a year, quarterly deadlines will come around fast (and repeatedly).

• Assuming your agent “handles it”: MTD is about your tax reporting, not your letting management.

What to do this month (a practical action plan)

1. Check whether you’re in the April 2026 wave (look at 2024–25 property + self-employment gross income).

2. Pick MTD-compatible software that suits landlords (multi-property, bank feeds, receipt capture).

3. Start keeping records digitally now (don’t wait until April).

4. Do a “dry run quarter”: pretend you’re submitting a quarterly update and see what breaks.

5. Speak to your accountant/tax agent about roles, reviews, and submissions.

NetRent note and disclaimer

NetRent does not provide legal or tax advice. This article is provided for general information only, based on our understanding of the current MTD for Income Tax rules and HMRC updates.

Telephone: 01352 721300
Email: support@netrent.co.uk