04/05/2026
Making Tax Digital (MTD) is one of the biggest changes to the UK tax system in recent years, and it’s set to directly impact landlords with rental income held in their personal name.
At its core MTD requires landlords to keep digital records of their income and expenses and to submit updates to HMRC using approved software. The aim is to make tax reporting more accurate, efficient, and up to date but it will also change how and when landlords manage their finances.
MTD isn’t being introduced all at once. Instead, it’s being rolled out in stages based on total income from property and/or self-employment.
Here’s how the timeline looks:
Stage 1 – Started April 2026
If earnings are £50,000 or more comply with MTD requirements.
Stage 2 – From April 2027
The threshold reduces to £30,000 or more.
Stage 3 – From April 2028
The threshold lowers again to £20,000 or more.
This means that even if MTD doesn’t affect you immediately there’s a strong chance it will in the near future.
What does this mean in practice?
🔹If you fall within the thresholds above you’ll need to:
🔹Use HMRC-approved software to manage records and submissions
🔹Keep digital records of all rental income and allowable expenses
🔹Submit quarterly updates to HMRC instead of one annual tax return
🔹Complete a Final Declaration by 31st January following the end of the tax year
This Final Declaration effectively replaces the traditional Self Assessment return bringing everything together for the year.
‼️Why this matters for landlords
The shift to quarterly reporting means landlords will need to stay on top of their bookkeeping throughout the year, rather than dealing with everything in one go at the deadline.
While that may sound like more work initially it can actually provide a clearer real time view of finances helping make better informed decisions about the property portfolio.
‼️Getting prepared early
Even if income is currently below the threshold preparing now can make the transition far smoother. Moving to digital record keeping early gives time to get comfortable with the systems and avoid last minute pressure when the rules apply.