Making Tax Digital for landlords: what changes and how to prepare

Yes. Making Tax Digital for landlords is part of MTD for Income Tax, which covers individuals with property income and self-employment income who are registered for Self Assessment. If you let property in your own name, the rules can apply to you.

Limited companies that own property are not part of MTD for Income Tax, because companies pay corporation tax rather than income tax. Partnerships will join at a later date that HMRC has not yet announced. This guide is for individual landlords. For the general rules that apply to everyone, see our main guide to MTD for Income Tax.

HMRC writes to landlords it expects to join, using their past returns. The rules apply based on your figures whether or not you receive a letter, so it is worth checking for yourself.

Rent. Qualifying income is your gross rental income before any expenses, plus your gross self-employment turnover if you also run a business. Mortgage interest, repairs, agent fees and other costs are not taken off for this test.

Income from a job, a pension, dividends or savings does not count towards the threshold. A landlord earning a salary of £45,000 with rent of £15,000 has qualifying income of £15,000, which is under all three thresholds on those figures.

If you own a property with someone else, such as a spouse or business partner, each of you looks at your own share of the rent when testing qualifying income. Two people who split £44,000 of rent equally each have £22,000 of property income for this test, not £44,000.

Each joint owner who is over the threshold, once their other qualifying income is added, joins MTD separately and reports their own share. The rules for joint ownership can have extra detail, especially where shares are not equal, so we check each case individually.

Your rent and your self-employed turnover are added together for the test. That combination brings many people in earlier than they expect.

Say you are a sole trader with turnover of £22,000 and you also receive rent of £12,000. Your qualifying income is £22,000 + £12,000 = £34,000. If those are your 2025/26 figures, that is over £30,000, so you join from 6 April 2027, even though neither income would bring you in on its own.

Once you are in, you send separate quarterly updates for each business: one for your sole trade and one for your property business. Your UK lettings normally count as a single property business, so you do not send a separate update for each house or flat. You still need to keep clear records for each property so you can see how each one is doing and claim the right expenses.

You record each item of rent and each expense digitally, with the date, amount and type. The expense categories are the ones you already use on your return. Allowable expenses for landlords include:

• repairs and maintenance (not improvements)
• letting and management fees
• insurance
• ground rent and service charges
• accountant's fees
• council tax and utilities when you, not the tenant, pay them
• advertising for tenants
• replacing domestic items such as furniture or appliances (replacement of domestic items relief)

Our landlord tax return guide explains these expenses in more detail.

A separate bank account for your lettings makes all of this much easier, because most MTD software can read bank feeds and suggest categories for you.

After the fourth quarter you file your tax return by 31 January, as now. A landlord joining on 6 April 2027 sends their first update by 7 August 2027 and their 2027/28 return by 31 January 2029.

Penalty points for late quarterly updates are not applied in 2026/27. From the following year, each missed update earns a point and 4 points means a £200 penalty.

Under Section 24, mortgage interest on residential lets is not deducted from your rental income. Instead you get a tax credit at the basic rate of 20% of your finance costs. MTD does not change this. You still record your mortgage interest so the credit can be worked out on your return.

Separately from MTD, new property income tax rates were announced for April 2027 at the Autumn Budget 2025. Accurate quarterly records will make it easier to plan for that change once the detail is confirmed. If your rent is small, our guide to the property income allowance explains the £1,000 allowance.

1. 1

   Add up your gross rent

   Take total rent from your latest return, your share only for joint property, and add any self-employed turnover. Compare it with £50,000, £30,000 and £20,000.

2. 2

   Gather your paperwork

   Collect tenancy agreements, agent statements, mortgage statements and receipts for each property.

3. 3

   Choose software

   Pick MTD-compatible software that handles property income, or a bridging tool if you prefer a spreadsheet.

4. 4

   Open a lettings bank account

   Keep rent and property costs separate from personal spending so bank feeds do most of the work.

5. 5

   Practise before you start

   Run a quarter or two in the software before your start date so the routine is in place.

6. 6

   Sign up and set reminders

   Sign up before your first quarter and diarise 7 August, 7 November, 7 February, 7 May and 31 January.

We work with landlords of one property or many. Through our MTD for Income Tax service we confirm your start date, set up software, turn agent statements into clean digital records, send your quarterly updates and file your return. Fees are fixed monthly, from £99 for landlords, and the price is fixed for 12 months unless your situation changes.

If you are not sure where you stand, ask for a free 20-minute chat. We will give you an exact price in writing within one working day.