Making Tax Digital is here: what landlords need to do

If you are a landlord earning more than £50,000 a year from rental income (or a combination of rental and self-employed income), your tax reporting has already changed. From 6th April 2026, Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) became mandatory. The annual Self Assessment return you have always filed in January has not disappeared entirely, but it has been transformed.

This guide explains what MTD for ITSA means in practice, whether it applies to you right now, and what you need to do before your first quarterly deadline on 7th August 2026.

What is MTD for ITSA?

Making Tax Digital for Income Tax is a government initiative requiring landlords and the self-employed to keep digital records and send income and expense summaries to HMRC four times a year, rather than once. The aim is to make the tax system more accurate and spread the administrative load across the year.

The annual Self Assessment return is replaced by two things:

1. Quarterly updates: Four short submissions per year summarising your rental income and expenses.
2. A final declaration: Filed after the tax year ends, this confirms your total income, claims reliefs and allowances, and works out what tax you owe. It replaces the old SA100 form and is still due by 31st January.

Think of the quarterly updates less like mini tax returns and more like checking in with HMRC to confirm your running totals. They do not trigger a payment — they are a record-keeping exercise. The final declaration is where the calculation and any payment obligation are confirmed.

Does it apply to you?

MTD for ITSA is being rolled out in phases based on qualifying income:

1. From 6th April 2026: landlords (and sole traders) with qualifying income over £50,000.
2. From 6th April 2027: qualifying income over £30,000.
3. From 6th April 2028: qualifying income over £20,000.

Qualifying income means your gross income from property and/or self-employment before any expenses or allowances are deducted. If your rental income is £52,000 but your net profit after costs is much lower, you are still caught by the £50,000 threshold. Portfolio landlords should note that gross rent across all properties is combined.

If you are uncertain whether your gross income meets the threshold, check your most recent Self Assessment return or speak to your accountant.

The quarterly update dates

For the 2026/27 tax year, the four quarters and their submission deadlines are:

1. Q1 (6th April to 5th July 2026): due 7th August 2026.
2. Q2 (6th July to 5th October 2026): due 7th November 2026.
3. Q3 (6th October 2026 to 5th January 2027): due 7th February 2027.
4. Q4 (6th January to 5th April 2027): due 7th May 2027.

You can also elect to use calendar quarters (ending 30th June, 30th September, 31st December, 31st March) if that fits better with how you already manage your accounts. Whichever you choose, each update is due within one month of the quarter end.

In 2026/27, HMRC has confirmed it will not charge penalty points for late quarterly updates. This grace period is designed to give landlords time to get used to the new system. Use it wisely: get your software set up and your records in order now rather than waiting until July.

Choosing your software

You cannot file MTD quarterly updates using the HMRC online portal. You must use HMRC-recognised software. A list of compatible products is available on GOV.UK. Popular options include:

1. Xero and QuickBooks: for landlords who already use cloud accounting software.
2. FreeAgent: popular with landlords who also run a business and want integrated accounting.
3. Bridging software such as 123 Sheets or VitalTax: which connect your existing spreadsheets to HMRC without requiring you to change how you currently manage records.

If you already use a spreadsheet to track your rental income and expenses, bridging software is likely the simplest route. Your spreadsheet workflow stays the same; the bridging tool handles the HMRC connection.

What records to keep digitally

MTD requires you to maintain digital records of your property income and expenses. For each property, you will need to record:

1. Gross rental income received.
2. Allowable expenses (maintenance, insurance, letting agent fees, mortgage interest, and so on).

Records must be stored within your MTD-compatible software, not on paper. If you currently keep paper receipts, most apps allow you to photograph them and attach them to the relevant transaction.

Exemptions: are you let off the hook?

HMRC recognises that some people genuinely cannot go digital. Exemptions are available on the grounds of digital exclusion, which covers:

1. Age, disability, or a health condition that prevents you from using digital tools.
2. Religious beliefs that are incompatible with electronic record-keeping.
3. Lack of internet access due to your location.

If you believe you qualify, you need to apply to HMRC in writing before your MTD start date. If you are already in scope and have not yet applied, do so as soon as possible.

What happens if you miss a deadline?

MTD uses a points-based penalty system. Each late quarterly update earns one penalty point. Accumulate four points and a fixed £200 penalty is charged. Every further missed deadline attracts an additional £200. Points reset after a sustained period of compliance.

As noted above, HMRC will not issue points during 2026/27, but this amnesty does not carry forward. From 2027/28, the full penalty regime applies.

What to do right now

• Check your qualifying income. If your gross rental (plus any self-employment income) exceeded £50,000 in 2024/25 or 2025/26, you are in scope from now.
• Choose and set up your software. The first quarterly deadline is 7th August 2026. Do not leave this until July.
• Register for MTD with HMRC. You need to sign up through your software or the HMRC website before you can submit. If you have not done this yet, do it today.
• Tell your accountant. If you use one, confirm they are set up to act as your MTD agent. They will need to be authorised through compatible software.
• Ensure your records from 6th April 2026 are in your software. Your Q1 update covers the period from 6th April, so any income or expenses from that date need to be captured digitally.

There is an upside to all of this: keeping on top of your finances quarterly means no more January scramble. Once the system is embedded, most landlords find it saves time overall and gives them a much clearer picture of their rental income throughout the year.

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