Posted: 12th January 2026
What is Making Tax Digital?
Making Tax Digital: What Landlords Need to Know and How to Prepare
The way landlords report their tax is changing — and while “Making Tax Digital” (MTD) may sound daunting at first, understanding what’s coming and preparing early can make the transition far smoother.
In this article, we explain what Making Tax Digital is, how it affects landlords, key dates to be aware of, and the practical steps you can take now to stay compliant and reduce stress later.
What is Making Tax Digital?
Making Tax Digital is a UK Government initiative designed to modernise the tax system. Its aim is to make tax reporting more accurate, more efficient, and more transparent by moving away from paper records and annual tax returns.
Under MTD, landlords will be required to:
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Keep digital records of income and expenses
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Use HMRC-approved software to submit information
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Provide regular updates to HMRC throughout the year
This marks a significant shift from the traditional once-a-year Self Assessment process many landlords are used to.
When Will Making Tax Digital Apply to Landlords?
The rollout of Making Tax Digital for Income Tax is being phased in over the next few years:
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From April 2026 – Landlords with gross annual income from property or self-employment over £50,000 (in the 2024 to 2025 tax year) will be required to comply
- From April 2027 – The income threshold will reduce to £30,000 for gross annual income from property or self-employment (in the 2025 to 2026 tax year)
- From April 2028 - The threshold reduces further to £20,000 for gross annual income from property or self-employment (in the 2026 to 2027 tax year)
If your rental income is above these levels, MTD will apply to you — even if you only own one property.
What Will Change in Practice?
Once you are within the scope of MTD, you will need to:
Keep digital records
Rental income and allowable expenses must be recorded digitally using compatible software. Spreadsheets may still be used, but only if they link to MTD-compatible software.
Submit quarterly updates
Instead of one annual return, you’ll submit summaries of income and expenses to HMRC every three months.
File an End of Period Statement
This confirms your final figures for the year and includes any adjustments.
Submit a Final Declaration
This replaces the traditional Self Assessment tax return and confirms all taxable income.
Importantly, quarterly updates are not tax bills — they are informational snapshots to keep HMRC up to date.
Why is MTD Being Introduced?
HMRC estimates that billions of pounds are lost each year due to avoidable errors in tax reporting. By introducing digital records and regular reporting, MTD aims to:
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Reduce errors and inaccuracies
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Improve transparency
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Help taxpayers better understand their tax position throughout the year
While it does mean more frequent reporting, many landlords find that spreading the workload across the year can actually make tax management easier in the long run.
How Can Landlords Prepare Now?
Even if MTD doesn’t apply to you yet, early preparation is strongly recommended. Simple steps you can take now include:
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Reviewing how you currently track income and expenses
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Moving away from paper records where possible
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Familiarising yourself with digital bookkeeping tools
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Ensuring your records are accurate and up to date
Starting early reduces the risk of rushed decisions, missed deadlines, or compliance issues later on.
How We Can Help
As your letting agent, we understand that tax and compliance changes can feel overwhelming — especially alongside evolving rental legislation.
We’re here to help by:
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Explaining how Making Tax Digital applies to your specific situation
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Helping you understand what records you’ll need to keep
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Working alongside your accountant or tax adviser where required
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Ensuring your rental records are clear, accurate, and compliant
Our aim is to make compliance straightforward, so you can focus on managing your property portfolio with confidence.
Final Thoughts
Making Tax Digital represents a major shift for landlords, but with the right preparation and support, it doesn’t have to be difficult. The key is understanding what’s coming and taking proactive steps well before the deadlines arrive.
If you’d like to discuss how Making Tax Digital may affect you, or need guidance on preparing your records, please don’t hesitate to get in touch with our team — we’re always happy to help.
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