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Making Tax Digital for Landlords

Making Tax Digital for landlords is arriving. Are you ready for the changes starting in April 2026?

If you rent out property or operate as a sole trader, you must prepare now. Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) changes how you report income and expenses to HMRC.

This blog explains what’s coming, when it starts, and what landlords must do.

What Is MTD for ITSA?

MTD for ITSA is part of HMRC’s digital tax strategy. It replaces the current Self Assessment process for many individuals.

Under MTD, landlords and sole traders must:

  • Keep digital records of income and expenses.
  • Use MTD-compatible software.
  • Submit quarterly updates to HMRC.
  • File an annual final declaration.

Want to know more about Making Tax Digital? Check our in-depth guide.

Who Must Comply?

From 6 April 2026, MTD applies to:

  • Sole traders and landlords.
  • With income £50,000 or more from property and/or business trading.

Let’s break this down:

  • Add your rental and trading income together.
  • If the total hits £50,000 or more in 2024/25, you join MTD in April 2026.
  • For example, rental income of £10,000 and trading income of £45,000 means you must comply.

Rental income from limited companies doesn’t count. Only unincorporated businesses are affected.

Second Phase: April 2027

From 6 April 2027, the threshold drops to £30,000. If your income from unincorporated property or business exceeds that, MTD kicks in.

This second wave affects thousands more landlords and sole traders.

Future Plans for Smaller Incomes

The Government plans to include those earning £20,000 or more. However, there’s no confirmed date yet.

We recommend preparing early. Digital record keeping and MTD software will soon be the norm.

What Changes for Landlords?

Currently, if your rental income is over £1,000, you must:

  • File a Self Assessment return.
  • Include property income and expenses.
  • Do this by 31 January following the tax year end.

You can use any method to keep records – paper, spreadsheets, or software.

Under MTD, this changes completely.

New MTD Obligations

As a landlord under MTD for ITSA, you must:

  1. Keep Digital Records

Say goodbye to paper records and manual spreadsheets. Use MTD-compliant software instead.

  1. Submit Quarterly Updates

Report income and expenses every quarter. The default quarters end on:

  • 5 July
  • 5 October
  • 5 January
  • 5 April

You can opt to use calendar quarters if preferred:

  • 30 June
  • 30 September
  • 31 December
  • 31 March

These updates are summary figures, not full accounts.

  1. Final Declaration

After the last quarter, submit a final declaration. This is your full tax return equivalent.

Include:

  • Adjustments
  • Reliefs
  • Other income (like dividends or employment)

Declare your tax position as complete and correct – just like the current Self Assessment system.

What Doesn’t Change?

You still:

  • Pay tax in the same way.
  • Follow the same deadlines for tax payments.

Only the reporting method changes. But the change is significant.

What If Your Income Drops?

Once you join MTD, you stay in – even if income later falls below the threshold.

You’ll only exit after your income stays below the threshold for three tax years in a row.

What Software Will You Need?

You must use MTD-compatible software to meet the requirements.

HMRC maintains a list of approved software.

Free software will be available for people with simple needs.

At I Hate Numbers, we can help you choose the right tool for your situation.

Why Act Now?

2026 might seem far away, but the time to prepare is now.

Here’s why:

  • You need to understand your reporting obligations.
  • You need to choose and test compatible software.
  • You must get used to quarterly reporting.
  • You may need to adjust how you manage cash flow and finances.

Delaying could result in errors, stress, and non-compliance.

How We Can Help You

At I Hate Numbers, we’ve supported countless landlords and sole traders with:

  • Understanding the rules about Making Tax Digital for Landlords
  • Choosing software that fits their needs.
  • Digital record keeping and training.
  • Accounting and tax advice.

Let us guide you through the change with confidence.

Book a Free Call Today

Don’t let Making Tax Digital for Landlords catch you off guard.

Book a free call with us today. We’ll walk you through your next steps and build a plan.

Book Your Call Now – Future-proof your finances and stay compliant with confidence.

Want to get ahead of MTD for ITSA? Let’s talk. You’ll be glad you did.