Last updated: 8 October 2026 · Next review: April 2027
Making Tax Digital (MTD) for Income Tax is the biggest change to how landlords report their income since Self Assessment went online. Instead of one tax return a year, landlords above a certain income level now keep digital records and send quarterly updates to HMRC using compatible software.
It started on 6 April 2026 for landlords and sole traders with the highest incomes and extends to more people in 2027 and 2028. This guide explains who is affected, when, what you actually have to send, and what it’s likely to cost you. Every date and threshold below comes from GOV.UK or HMRC.
The key dates and thresholds
Whether you need to use MTD depends on your qualifying income — and HMRC decides this from a specific earlier tax return.
| Your qualifying income | Measured on your return for | You must use MTD from |
|---|---|---|
| Over £50,000 | 2024–25 tax year | 6 April 2026 |
| Over £30,000 | 2025–26 tax year | 6 April 2027 |
| Over £20,000 | 2026–27 tax year | 6 April 2028 |
Source: GOV.UK — Find out if and when you need to use Making Tax Digital for Income Tax.
HMRC checks your Self Assessment return each year to see whether you’ve crossed a threshold, so someone below £20,000 today could still be brought in later if their income rises.
What “qualifying income” means (and why it catches landlords out)
The single most common misunderstanding is that the thresholds relate to profit. They don’t. Qualifying income is your gross income from:
- self-employment, and
- UK and overseas property,
added together, before any expenses are deducted.
So a landlord who collects £32,000 a year in rent but makes a much smaller profit after mortgage interest, repairs and agent fees is still over the £30,000 threshold. And if you’re also a sole trader, your trading turnover is added to your rental income.
Income from employment (your PAYE salary) and pensions is not included in qualifying income.
Joint owners: if you own a property jointly, GOV.UK explains how your share is assessed, including where you only receive your share of the income after expenses. Check the official guidance if this applies to you, as the treatment depends on how the income is split.
What you actually have to do under MTD
1. Keep digital records
You must record each item of property income and each allowable expense digitally, in MTD-compatible software (or in a spreadsheet connected to compatible “bridging” software). Paper records and a shoebox of receipts are no longer enough on their own.
2. Send quarterly updates
Every three months your software adds up your records into totals for each income and expense category and sends them to HMRC. According to HMRC’s MTD guidance, the deadlines are:
| Quarterly update | Deadline |
|---|---|
| First update | 7 August |
| Second update | 7 November |
| Third update | 7 February |
| Fourth update | 7 May |
For the first MTD tax year (2026–27), that means updates by 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027.
A quarterly update is not a tax return and doesn’t calculate a final bill — it’s a summary of your figures so far. You can correct figures in later updates.
3. Submit your tax return through the software
After the tax year ends, you finalise your figures and submit your return from your MTD software. For the 2026–27 tax year, the deadline is 31 January 2028 — the same annual deadline you’re used to. Tax is still paid on the familiar Self Assessment timetable.
Signing up
To sign up, GOV.UK says you must be registered for Self Assessment and have submitted a tax return within the last two years. If HMRC’s records show you’re over a threshold, it will write to you, but it’s your responsibility to check — don’t wait for the letter.
Exemptions
Some people can be exempt. The main one is being digitally excluded — for example, where age, disability, location or another reason means it isn’t reasonably practicable for you to use digital tools. Exemptions generally need to be applied for; they aren’t automatic. If you’re exempt, you carry on filing a normal Self Assessment return.
Penalties: what happens if you miss a deadline
MTD uses a points-based system for late submissions. You get one point for each missed deadline and a £200 penalty once you reach four points, then another £200 for each further missed deadline. For the 2026–27 tax year, HMRC says it won’t give points for late quarterly updates, which gives first-year users some breathing space. Late payment penalties and interest apply separately.
We explain the full rules, including how points expire and how the late-payment percentages work, in our guide to MTD penalties.
What MTD will cost you
MTD itself doesn’t come with a fee from HMRC, but it does bring real costs:
- Software. You need MTD-compatible software. Landlord tools and general accounting packages typically charge a monthly subscription — for example, the published entry prices we track range from around £12 to £20 a month for common options. See our landlord software price table for the full comparison and our caveats on vendor-published prices.
- Time. Four updates a year plus a final return means more regular bookkeeping than one annual scramble.
- Accountant or bookkeeper fees. Some landlords choose to pay a professional to handle quarterly submissions. If you already use an accountant, ask now whether their fee will change under MTD.
All of these costs are generally allowable expenses against your rental income, as they are incurred wholly and exclusively for your letting business — see GOV.UK’s guide to working out rental income for the rules.
Choosing software
Before you choose, confirm that the product is on HMRC’s list of software compatible with MTD for Income Tax and that it supports property income, not just self-employment. Then think about how many properties you have, whether you want rent tracking and maintenance tools, and whether you need to share access with an accountant. Our software comparison and 8-point checklist walk through this step by step.
What to do now
If you’re not sure where you stand, the fastest route is our step-by-step MTD checklist for landlords. In short:
- Find your most recent Self Assessment return and add up your gross property and self-employment income.
- Compare it with the table above to find your start date.
- Choose compatible software well before that date.
- Start keeping digital records at least a quarter early so the first real update isn’t your first attempt.
- Put the four quarterly deadlines in your calendar.
How MTD applies in common landlord situations
You have a full-time job and one buy-to-let. Your salary doesn’t count towards qualifying income, only the gross rent. A single property let at £1,500 a month brings in £18,000 a year — below every threshold announced so far. At £1,800 a month (£21,600 a year), you’d be in scope from April 2028 if that’s what your 2026–27 return shows.
You’re a landlord and a sole trader. Both incomes are added together. This is the group most likely to be caught earlier than expected, because two modest incomes can cross £30,000 or £50,000 together.
You own a property jointly with a partner. Each owner looks at their own share of the income. GOV.UK has specific guidance for joint owners, including where your share is only reported to you after expenses, so check it before assuming you’re in or out.
You have overseas property as well as UK property. Overseas property income counts towards qualifying income. Choose software that handles foreign property as well as UK property.
You use a letting agent. Your agent may collect rent and pay bills for you, but the MTD obligation is yours. Ask your agent for statements in a format your software can import, and make sure the gross rent (before their fees) is what you record as income. Letting agent fees are an allowable expense.
Your income is falling. HMRC checks your return each year. If your qualifying income drops below the threshold, the guidance explains when you can stop using MTD — it isn’t immediate, so don’t cancel your software the moment your rent falls.
Common mistakes to avoid
- Using net profit instead of gross income to decide whether you’re in scope.
- Forgetting self-employment turnover when adding up qualifying income.
- Leaving sign-up until the last minute, then discovering your software doesn’t support your type of income.
- Treating quarterly updates as optional because HMRC isn’t giving points for late quarterly updates in 2026–27 — from 2027–28 they count.
- Mixing personal and property transactions in one bank account, which makes digital record-keeping much slower.
- Assuming your accountant has signed you up. Check it’s done, and check who is submitting each quarter.
Frequently asked questions
Is the £50,000 threshold based on profit or rent received? On gross income — rent received plus any self-employment turnover, before expenses.
Do I need MTD if my rental income is £18,000? Not under the thresholds announced so far. The lowest confirmed threshold is £20,000 from April 2028. Keep an eye on our regulation timeline in case this changes.
Does my salary count towards qualifying income? No. Employment income and pensions are not included.
Do quarterly updates mean I pay tax every quarter? No. Quarterly updates are summaries. You still pay tax on the normal Self Assessment dates.
Can I keep using a spreadsheet? Only if it is linked to MTD-compatible bridging software that submits to HMRC for you.
Sources
- GOV.UK — Find out if and when you need to use Making Tax Digital for Income Tax (last updated 26 March 2026)
- HMRC — Quarterly updates for Making Tax Digital
- GOV.UK — Use Making Tax Digital for Income Tax
- GOV.UK — Penalties for Making Tax Digital for Income Tax (last updated 30 March 2026)
- GOV.UK — Income Tax when you rent out a property: working out your rental income
This article summarises official guidance and is not tax advice. Last checked: 8 October 2026.
Related guides
- Making Tax Digital Penalties Explained: Points, Fines and Late Payment Charges
- Making Tax Digital Checklist for Landlords: 10 Steps to Get Ready
- Landlord Safety Certificate Costs in 2026: Gas Safety, EICR and EPC
- The True Cost of Being a Landlord in the UK (2026)
- The Renters’ Rights Act: What It Means for Landlords in 2026
Figures are published examples, estimates and averages, not quotes. Rules change: check the linked official source before you act.