Making Tax Digital (MTD) is one of the most significant upcoming changes to the UK tax system for landlords in recent years.
If you currently complete a Self Assessment tax return, the way you report rental income to HM Revenue & Customs (HMRC) is set to change. From April 2026, HMRC will begin introducing new digital reporting requirements for landlords above a certain income threshold.
Although the changes will be phased in gradually, April 2026 marks the first major milestone. Understanding what MTD involves now can help landlords prepare early and avoid unnecessary disruption later.
This guide explains what is changing, who will be affected, and what practical steps landlords can take next.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax is a new HMRC system designed to modernise how income from property and self-employment is reported.
At present, most landlords submit one tax return at the end of the year. Under MTD, reporting becomes a more structured process carried out digitally across the tax year.
Those within the scope of the rules will be expected to:
- Maintain digital records of rental income and allowable expenses
- Send quarterly summary updates to HMRC during the year using MTD-compatible software
- Complete a final declaration once the tax year ends
The intention is to improve accuracy, reduce common reporting errors, and create a more efficient system over time.
April 2026: When the first landlords must comply
MTD for Income Tax is being introduced in stages, beginning with landlords who have higher levels of qualifying income.
From 6 April 2026, landlords will be required to follow the new system if their total qualifying income from property and/or self-employment exceeds £50,000 per year.
HMRC has confirmed that the threshold will be reduced in later years:
- April 2027 — qualifying income over £30,000
- April 2028 — qualifying income over £20,000 (subject to legislation)
This gradual rollout means more landlords will come into the system over the next few years.
Will Making Tax Digital apply to your rental income?
You will need to use Making Tax Digital for Income Tax if:
- You are an individual registered for Self Assessment
- You receive income from property letting, self-employment, or both
- Your qualifying income exceeds the relevant threshold
Qualifying income refers to your gross income before expenses are deducted, rather than your profit.
It is also important to note that landlords operating through limited companies are not included under these Income Tax rules, as companies report under Corporation Tax instead.
How will rental income reporting change under MTD?
The key change under Making Tax Digital is not the amount of tax paid, but how rental income information is recorded and submitted.
Keeping records in a digital format
Landlords will need to store details of:
- rent received
- repairs and maintenance costs
- letting agent fees
- other allowable property expenses
Once MTD applies, paper-only systems will no longer meet HMRC requirements.
Submitting updates during the tax year
Instead of reporting income only once annually, landlords will send summary updates throughout the tax year.
These submissions provide HMRC with an ongoing view of income and expenses, but they are not final tax calculations. The full position will still be confirmed after the year ends.
Final declaration and payment deadlines
After the tax year finishes, landlords will complete a final declaration confirming their figures.
Importantly, the tax payment timetable remains unchanged. Income Tax will still be due by 31 January following the end of the tax year.
Software and support requirements
HMRC will not provide its own software platform for Making Tax Digital.
Instead, landlords (or their accountants) will need to use MTD-compatible software that supports digital record keeping and allows updates to be submitted directly to HMRC as required.
Some landlords may manage this independently, while others may prefer support from a tax adviser or accountant who can oversee the transition.
HMRC also provides guidance on what to consider when selecting a suitable software provider.
How landlords can prepare now
Although April 2026 may still feel some way off, taking early steps can make the transition far smoother.
Landlords may wish to:
One: Review income levels
Check whether your combined rental and self-employment income exceeds £50,000.
Two: Seek professional advice
An accountant can clarify how MTD will apply in your circumstances and recommend appropriate tools.
Three: Assess your current approach
If you rely mainly on spreadsheets or paper receipts, now is a good time to explore digital alternatives.
Four: Keep documentation organised
Clear rental statements and accurate expense records will become increasingly important under the new reporting system.
Next steps ahead of the MTD rollout
Making Tax Digital introduces a new way of reporting rental income, with digital processes and quarterly updates becoming mandatory from April 2026 for landlords above the initial threshold.
By understanding the requirements early and putting the right systems in place, landlords can approach the change with greater confidence when the new rules come into force.
Ellis & Co can support landlords with professional property management, clear rental documentation, and guidance to help you stay organised as reporting obligations evolve. If you would like advice ahead of April 2026, speak to your local Ellis & Co branch.
