Making Tax Digital for Income Tax is now here for landlords and the self-employed. Since 6 April 2026, self-employed people and landlords with qualifying income above £50,000 have been required to keep digital records and submit quarterly updates to HMRC.
If your income sits below that figure, you could still be brought into MTD for income tax from April 2027 or April 2028 instead, so it’s worth checking when the rules could apply to you.
HMRC believes that around 864,000 sole traders and landlords should be required to follow MTD rules, and by mid-August 2026, they confirmed that roughly half of them had submitted their first quarterly update. That leaves a significant number still unaccounted for, and potentially landlords who don’t realise the rules already apply to them or that they’ve missed an MTD deadline.
Keep reading as we explain who MTD applies to, the deadlines you need to know, and what you need to do next depending on where you currently stand. If you need advice for your specific situation, get in touch with our property accountants.
Is Making Tax Digital for Income Tax already affecting you?
MTD for Income Tax is being rolled out in three phases. Whether you are already expected to comply depends on your qualifying income (i.e., your gross property income and self-employment income before expenses).
HMRC looks back two tax years to decide. Your obligation from April 2026 was set by the 2024/25 return you filed in January 2026, and April 2027 will be decided by the return you file this coming January.
Here’s what that looks like:
| Phase | Start date | Qualifying income threshold | Based on relevant tax return for |
|---|---|---|---|
| Phase 1 | 6 April 2026 | £50,000 | 2024/25 |
| Phase 2 | 6 April 2027 | £30,000 | 2025/26 |
| Phase 3 | 6 April 2028 | £20,000 | 2026/27 |
This means you could already be mandated without having noticed – we’ll get to that shortly.
What actually changes for landlords?
Making Tax Digital only changes how you report your income, not how much tax you have to pay. So you can relax knowing your allowable expenses, income tax rules, and payment dates all stay the same. But you will need to get more tech-savvy and keep on top of your bookkeeping.
- Before MTD… You kept receipts and bank statements through the year, then pulled everything together in December or January and filed one Income Tax Self-Assessment return.
- After MTD… You record income and expenses digitally as they happen using MTD-compatible software, send HMRC a short summary every three months, and confirm the full picture once a year through a Final Declaration.
What are the MTD deadlines for landlords?
Under MTD, you have to submit four quarterly updates a year, on 7 August, 7 November, 7 February, and 7 May, followed by a Final Declaration by 31 January after the tax year ends.
Key dates you need to know at a glance:
| Update | Period covered | Submit by |
| Quarter 1 | 6 April – 5 July 2026 | 7 August 2026 |
| Quarter 2 | 6 July – 5 October 2026 | 7 November 2026 |
| Quarter 3 | 6 October 2026 – 5 January 2027 | 7 February 2027 |
| Quarter 4 | 6 January – 5 April 2027 | 7 May 2027 |
| Final Declaration | Full 2026/27 tax year | 31 January 2028 |
What if you miss a deadline?
If you submit your updates late, you get penalty points rather than instant fines. Four points trigger a £200 charge, then another £200 for each late submission after that. Points clear 24 months after the last one, provided you haven’t reached four points in that period.
The first quarterly update was recently due on 7 August 2026 and covered your income and expenses from 6 April to 5 July 2026. If you missed it, you can still submit it. HMRC is not issuing penalty points for late quarterly updates during 2026/27, so a late first submission will not cost you any points. But the update is still a legal requirement, and all four quarterly updates must be filed before you can complete your year-end return.
The next standard deadline is 7 November 2026. If you act now, you can be fully back on track by then.
Need professional MTD guidance? Contact Ascott Blake and we’ll help you see where you stand.
How is your qualifying income worked out?
Your qualifying income is your gross income from property and self-employment before any expenses come off, as reported on your most recent tax return.
“Gross” is the key word. HMRC isn’t looking at your profit. A landlord with £55,000 of gross rental income and £30,000 of costs has qualifying income of £55,000, not £25,000.
Some income is left out of the test altogether, such as employment earnings, pensions, savings interest, dividends, and partnership income. So if you have a £70,000 salary and £22,000 of UK property income, your gross qualifying income is £22,000.
Does self-employment income count towards the threshold?
Yes. If you receive income from both rental properties and self-employment, HMRC combines these qualifying income sources when deciding whether you need to comply with Making Tax Digital.
For example, if you earn £34,000 in rent and £19,000 freelancing, your total gross qualifying income is £53,000. In this case, you’d be mandated from April 2026, even though neither source alone would have taken you over the relevant threshold.
Read more on how MTD affects self-employed people.
Foreign property income counts too. The difference is that all your UK properties are treated as a single property business, whereas overseas properties require digital records to be kept for each property.
I have jointly owned property; does MTD for Income Tax still apply?
Yes, but it’s only your share of the property income that matters when you’re working out whether you meet the Making Tax Digital threshold.
We’ve seen it before, where joint property owners assume the threshold applies to the property as a whole. It’s understandable why you might think that, but it actually applies to the person.
For example, if a jointly owned property brings in £80,000 a year and you receive a 50% share, only your £40,000 share would count towards your qualifying income. Then, if you also have self-employed income or income from other properties, that would need to be added too.
So if you jointly own a property and your share of the income (plus any self-employed income) exceeds the MTD threshold, you’ll need to follow the MTD for Income Tax rules. You’ll use only your share of the income to prepare and submit quarterly updates and the final declaration.
What records should landlords keep for MTD?
You need to record income and expenses digitally using MTD compatible software. You can still use a spreadsheet, but you’ll need special bridging software to connect it to HMRC.
Throughout the tax year, you should keep digital records of:
- Your rental income
- Tenant deposits
- Letting agent and property management fees
- Repairs and maintenance
- Insurance
- Invoices and receipts
- And any other relevant financial information
How Ascott Blake can help landlords prepare
Making Tax Digital represents a significant change for landlords, but it doesn’t have to become an administrative burden. Whether you’re a new landlord or have a growing portfolio, our property accountants can take the work off your shoulders so you can focus on your investments.
At Ascott Blake, we help landlords across the UK work out whether they are required to comply with Making Tax Digital and prepare accordingly. We’ll help you choose software that suits how you work, organise and prepare your records, and when it comes to it, submit those quarterly updates and final declaration.
Get in touch with our team at Ascott Blake today or call the office on 01279 797 222.
Frequently asked questions about landlord MTD
Does Making Tax Digital replace my Self-Assessment tax return?
If you fall under MTD rules, you will have to report your taxable income differently. Instead of one annual return, you’ll submit four quarterly updates and then a final declaration, which will confirm your Income Tax position in place of the traditional Self-Assessment return.
Do quarterly updates mean I’ll pay tax four times a year?
No. Quarterly updates are reports of your income and expenses, not tax payments. Your tax payment dates remain separate from the reporting requirements.
Is digital record keeping compulsory?
Yes, if you meet MTD requirements, you must keep digital records using MTD-compatible accounting software.
Can I still claim mortgage interest?
Yes, you can claim mortgage interest, just not as an allowable expense. Since April 2020, residential property finance costs (typically mortgage interest) give you a tax reducer worth 20% of the cost rather than a deduction from your rental profits. MTD doesn’t change that. What it does change is that finance costs must be recorded separately from your other expenses, and the 20% credit will be applied when you submit your final declaration.
Am I exempt from MTD if I own property through a limited company?
Companies pay Corporation Tax, so MTD for Income Tax doesn’t apply there. However, if you own a company and also hold rental property in your own name, you may have to comply with MTD personally if your property income exceeds the MTD threshold.
