From 6 April 2026, Making Tax Digital for landlords becomes a legal requirement for many UK property owners. The introduction of Making Tax Digital (MTD) for Income Tax represents one of the most significant changes to the Self Assessment system in recent years, and it will fundamentally alter how landlords report rental income to HMRC.
If you currently file one annual tax return and keep records on spreadsheets or paper, the process is about to change. Under Making Tax Digital for landlords in 2026, eligible property owners will need to keep digital records and submit quarterly updates using HMRC approved software.
Understanding what is changing and preparing early will help you avoid disruption and potential penalties.
What Is Making Tax Digital for Landlords?
Making Tax Digital (MTD) is the government’s long-term plan to modernise the UK tax system. While MTD for VAT has already been introduced, April 2026 marks the beginning of MTD for Income Tax Self Assessment (ITSA), which directly affects landlords.
Making Tax Digital for landlords means rental income and allowable expenses must be recorded digitally and reported to HMRC every quarter. Instead of submitting just one annual Self Assessment tax return, landlords within scope will provide four quarterly updates plus a final declaration at the end of the tax year.
The objective is to reduce errors, increase transparency and give taxpayers a clearer picture of their tax position throughout the year. However, for many landlords, this will require changes to how records are kept and how tax information is submitted.
Who Must Comply With MTD for Landlords in 2026?
Making Tax Digital for landlords in 2026 applies to individuals (not limited companies) whose gross rental income, combined with any self-employment income, exceeds £50,000 in the 2024/25 tax year.
It is important to stress that HMRC looks at gross income before expenses, not profit. Even if your rental business only generates modest profit after costs, you may still fall within the rules if total rental income exceeds the threshold.
From April 2027, the income threshold is expected to reduce to £30,000, meaning a significantly larger number of landlords will be required to comply. A further reduction to £20,000 is planned in later years, gradually bringing most unincorporated landlords into the Making Tax Digital system.
Landlords operating through a limited company are not affected by MTD for Income Tax, as companies already report through Corporation Tax systems.
How Making Tax Digital Changes the Way Landlords Report Income
Under the current Self Assessment system, landlords keep records during the year and file a tax return once annually by 31 January. Making Tax Digital for landlords replaces this single submission with a more continuous reporting model.
From April 2026, landlords within scope must submit quarterly summaries of income and expenses to HMRC. These updates do not require tax to be paid quarterly, but they provide HMRC with an ongoing view of your rental business performance.
At the end of the tax year, landlords must then submit a final declaration, confirming total income, expenses and any other sources of taxable income. This replaces the traditional Self Assessment return but functions in a similar way.
The shift is administrative rather than a change in tax rates. However, it does increase reporting frequency and requires greater record-keeping discipline.
Digital Record-Keeping Requirements for Landlords
A central requirement of Making Tax Digital for landlords is the maintenance of digital records. This means rental income and expenses must be recorded using compatible accounting software. While spreadsheets may still be used in some cases, they must link digitally to MTD-compliant software for submission to HMRC.
Landlords will need to record rental income received, allowable expenses such as repairs and maintenance, letting agent fees, insurance, and mortgage interest. These records must be stored digitally and retained for at least five years.
For landlords who have historically relied on manual processes, this may require adopting new systems well in advance of April 2026. Early preparation reduces the risk of last-minute compliance issues.
Quarterly Updates Under MTD for Landlords
One of the biggest practical changes introduced by Making Tax Digital for landlords is the requirement to submit quarterly updates.
Each tax year will be divided into four reporting periods. After each quarter ends, landlords must submit a summary of income and expenses using approved software. These updates provide an estimate of taxable profit but do not finalise the tax bill.
While quarterly reporting may initially seem burdensome, it can also improve financial oversight. Many landlords will benefit from having clearer visibility of profits and potential tax liabilities throughout the year, rather than facing a single large calculation at year-end.
Key Deadlines Landlords Should Be Aware Of
The first group of landlords affected must comply from 6 April 2026. Eligibility is determined using figures from the 2024/25 tax return, meaning preparation should begin well before the deadline.
Quarterly submissions will follow standard reporting dates during the 2026/27 tax year, and the final declaration will still align with the 31 January deadline after the tax year ends.
Because compliance is based on historic income, landlords may receive notification from HMRC confirming they must register for MTD. However, responsibility ultimately lies with the taxpayer to ensure they comply.
Penalties for Non-Compliance
HMRC will apply a points-based penalty system for late submissions under Making Tax Digital for landlords. Repeated late filings can result in financial penalties.
Although HMRC has indicated there may be a light-touch approach during the early stages of implementation, landlords should not rely on leniency. As with VAT MTD, enforcement is expected to become stricter once the system is fully operational.
Ensuring systems are in place before April 2026 is the safest way to avoid unnecessary penalties.
How Landlords Can Prepare Before April 2026
Preparing for Making Tax Digital for landlords in 2026 should begin now, particularly if your income is close to or above the £50,000 threshold.
Review your 2024/25 rental income to determine whether you will fall within scope. If you do, begin exploring MTD-compatible accounting software and consider whether professional support may help streamline the transition.
It is also sensible to separate personal and rental finances if they are currently mixed. Dedicated bank accounts for property income make digital tracking significantly easier and reduce reporting errors.
For landlords managing multiple properties, early adoption of structured record-keeping can save considerable time once quarterly submissions become mandatory.
Will Making Tax Digital Affect Your Tax Bill?
Making Tax Digital for landlords does not directly increase tax rates. Income tax bands, allowable expenses and reliefs remain unchanged.
However, more frequent reporting may reduce errors and increase HMRC’s visibility over income patterns. This means accurate and consistent record-keeping becomes even more important.
For some landlords, quarterly visibility may improve cash flow planning by highlighting expected tax liabilities earlier in the year.
Final Thoughts on Making Tax Digital for Landlords in 2026
Making Tax Digital for landlords in 2026 is less about paying more tax and more about changing how tax is reported. The introduction of digital record-keeping and quarterly submissions represents a structural reform of the Self Assessment system.
Landlords with gross rental income above £50,000 must prepare now, as eligibility is determined by earlier tax returns. With thresholds set to fall in subsequent years, even smaller landlords will eventually be drawn into the MTD framework.
The key to managing Making Tax Digital successfully is early preparation, the right software, and consistent record-keeping habits. By acting before April 2026, landlords can transition smoothly and avoid unnecessary stress or penalties.
