Making Tax Digital for Landlords – Are You Ready?

Following our earlier overview of Making Tax Digital for Income Tax Self-Assessment (MTD for IT here), landlords should now consider how prepared they are for the practical changes ahead. With implementation beginning from April 2026 for some landlords, early planning is essential.

While MTD for IT does not change how much tax landlords pay or when those payments are due, it introduces digital record keeping and quarterly filing requirements.

MTD timelines for landlords

MTD for IT will be introduced in phases, based on your gross qualifying income rather than profit:

From April 2026 – landlords with gross qualifying income over £50,000

From April 2027 – this threshold then reduces to £30,000

From April 2028 – HMRC plans to extend MTD to those earning over £20,000

To note, limited companies are excluded from MTD IT, these rules will only apply to individuals, so landlords operating through a company will not need to comply.

Gross rental income and joint ownership

The MTD thresholds are based on gross rental income and not net profit. This means that even landlords with relatively low profits after expenses may still fall within scope if their rental income exceeds the relevant threshold listed above.

Where properties are owned jointly, rental income must be split according to beneficial ownership, with each individual assessed separately.

For example, a property generating £40,000 gross income owned equally by two individuals results in £20,000 per owner. Depending on other income, one or both owners may be required to register for MTD and submit quarterly updates.

As a reminder, income received from managing agents oftens suffers costs deducted at source, such as letting charges and repairs. Rental income needs to be grossed up for the deduction of these expenses. Expenses must also be recorded in sufficient detail to distinguish allowable property expenses, such as repairs, from non-deductible items.

Digital record keeping and expense recording

Landlords must maintain digital records of income and expenses using HMRC-compatible software, submitting four quarterly updates plus a final declaration by 31 January following the tax year end.

Under standard tax‑year quarters, the quarterly updates and deadlines are:

Quarter 1 (6 Apr – 5 Jul): Deadline 7 August

Quarter 2 (6 Jul – 5 Oct): Deadline 7 November

Quarter 3 (6 Oct – 5 Jan): Deadline 7 February

Quarter 4 (6 Jan – 5 Apr): Deadline 7 May

However, you can elect to use quarterly periods that align with the end of each month in the quarter, for example 30^th June, 30^th September etc. The same submission deadlines of the 7th of the month after the period end will still apply.

Late filing penalties and soft-landing period

HMRC has introduced a soft-landing period for landlords required to join MTD from April 2026. During the first 12 months, no penalty points will be issued for missed quarterly updates, although interest on late tax payments still applies.

After the soft-landing period ends, a points-based system applies. Each missed quarterly update, or final declaration earns 1 penalty point, which remains on record for 12 months. Once 4 points accumulate, HMRC will issue a £200 financial penalty, with further missed submissions potentially attracting additional penalties.

Software options for Landlords for MTD

MTD compatible software for landlords includes a range of solutions such as Xero, QuickBooks, FreeAgent, Hammock, and Landlord Studio. Some of these software packages offer more comprehensive features for property management and reporting, while others provide a simpler option. Landlords should consider the level of detail required, ease of use, and cost when selecting software. Excel spreadsheets can still be used, but only when supported by compliant bridging software.

It is important to check that your chosen software meets HMRC’s digital submission requirements for Income Tax Self-Assessment. HMRC have provided an official tool to confirm whether a software product is recognised as compatible, which can be found here,

Preparing now

Landlords who may fall within the MTD thresholds should review their record keeping, software, and quarterly reporting processes now. Professional guidance can help ensure your records are fully compliant ahead of the deadlines.

If you require assistance, you can contact your local Perrys branch, where our team can provide advice and support to help get you ready for MTD for IT.