Making Tax Digital for Landlords: What You Need to Know

Making Tax Digital for Landlords: What You Need to Know | 3-Minute Read

The UK government’s Making Tax Digital (MTD) initiative is transforming how landlords manage and report their property income. Designed to simplify tax compliance and reduce errors, MTD is rolling out in phases—and landlords need to be ready. 

Whether you own a single rental property or manage a portfolio, here’s a clear breakdown of what MTD means for you. 

What Is Making Tax Digital? 

MTD is HMRC’s move to digitise the tax system. Instead of filing a single annual Self-Assessment return, landlords will: 

• Keep digital records of income and expenses.
• Submit quarterly updates to HMRC.
• File an End of Period Statement (EOPS) and a Final Declaration at year-end.

The aim? More accurate tax reporting, fewer mistakes, and better visibility into your tax obligations. 

Key Deadlines for Landlords 

MTD for Income Tax Self-Assessment (ITSA) is being phased in:

• April 2026: Landlords with gross property income over £50,000 must comply.
• April 2027: Threshold drops to £30,000.
• Below £30,000: Not yet required (subject to future updates).

If you fall into one of these categories, it’s time to start preparing. 

Who Needs to Comply? 

• Individual landlords (not companies) with qualifying income.
• Joint property owners must each report their share.
• Self-employed individuals with rental income. 

Note: Limited companies are not yet included under MTD for ITSA but may be affected by future digital tax reforms. 

What You’ll Need to Do 

Here’s a step-by-step overview of your new responsibilities: 

1. Keep Digital Records 
   Track rental income and allowable expenses using MTD-compatible software. 
2. Submit Quarterly Updates 
   Every three months, send summaries of your income and expenses to HMRC. 
3. End of Period Statement (EOPS) 
   At the end of the tax year, confirm your totals and make any necessary adjustments. 
4. Final Declaration 
   Submit your final tax liability—this replaces the traditional Self-Assessment return. 

Choosing the Right Software 

You’ll need HMRC-approved software to comply. Popular options include: 

• Landlord Vision
• Landlord Studio
• Xero, QuickBooks, FreeAgent
• Spreadsheets with bridging software (less ideal for complex portfolios) 

Choose a platform that suits your property size, accounting needs, and comfort level with tech. 

Are There Any Exemptions? 

Yes. You may be exempt if: 

• Your income is below the threshold.
• You’re digitally excluded (e.g., due to disability or lack of internet access).
• You operate through a limited company (for now). 

Why It’s Worth Preparing Early 

While MTD may feel like a burden, it offers real benefits: 

• Fewer tax errors.
• Better financial planning.
• Easier mortgage and finance applications.
• More organised record-keeping. 

Final Thoughts 

Making Tax Digital is coming—and landlords who prepare early will benefit most. Start exploring software options, digitise your records, and get familiar with quarterly reporting. The sooner you adapt, the smoother the transition will be.