The UK tax system is changing, with the government introducing Making Tax Digital (MTD) as part of its move towards digital tax administration.

MTD is designed to replace the traditional annual paper-based Self-Assessment process with a digital reporting system. Landlords with qualifying income will be required to keep digital records and submit updates to HMRC using compatible software.

This article provides an overview of what landlords need to be aware of, when the changes are expected to apply, and how to prepare.

The Timeline: When Will MTD Apply to Landlords?

Making Tax Digital for Income Tax Self-Assessment (ITSA) is being introduced in stages, based on gross annual income (total income before expenses), including rental income.

Annual Income	Start Date	What This Means
Over £50,000	April 2026	Landlords in this group will be required to follow MTD rules from this date
Over £30,000	April 2027	Landlords in this group will join the scheme one year later
Under £30,000	To be confirmed	The government is still reviewing how MTD will apply

Please note:

The income thresholds apply to total qualifying income, not rental income alone. For example, rental income combined with income from self-employment may determine when MTD applies.

What Is Changing Under Making Tax Digital?

Under the current system, landlords typically submit one Self-Assessment tax return each year. Under MTD, reporting will take place throughout the tax year.

The process will include:

1. Digital Record Keeping
   Rental income and allowable expenses will need to be recorded digitally using compatible software or spreadsheets. Paper-only records will no longer meet HMRC requirements.
2. Quarterly Updates
   A summary of rental income and expenses will be submitted to HMRC every three months using MTD-compatible software.
3. End of Period Statement (EOPS)
   At the end of the tax year, landlords will finalise their rental income figures.
4. Final Declaration
   All other sources of income, such as savings or pensions, will be included to confirm the overall tax position for the year.

Steps Landlords May Wish to Consider Now

Although MTD may not apply immediately for all landlords, becoming familiar with the requirements in advance can help support a smoother transition.

Review Income Levels

Checking gross income from recent tax years can help landlords understand when MTD is expected to apply.

Use Digital Record-Keeping

Landlords who currently use paper records may wish to consider moving to digital formats, such as spreadsheets or accounting software designed for rental income.

Check Systems and Support

MTD requires the use of software that can connect directly with HMRC systems. Landlords may also find it helpful to ensure their HMRC online account details, including their Unique Taxpayer Reference (UTR), are accurate and accessible. Professional tax support may be used where appropriate.

Start Preparing Now for a Smooth Transition

For landlords, particularly those managing multiple properties or working with housing associations, Making Tax Digital represents a change in reporting processes rather than a change in tax rules.

By understanding the requirements and adopting digital record-keeping practices ahead of time, landlords can approach the transition in a measured and manageable way. This allows landlords to make changes at a pace that suits their individual circumstances while continuing to focus on property management and tenant support.

Important Information

This article is provided for general information only and does not constitute tax, financial, or legal advice. Tax requirements and thresholds may change, and individual circumstances will vary. Landlords may wish to seek independent professional advice where appropriate.