Making Tax Digital: a checklist for landlords

If you earn rental income, major changes are coming to the way you report and pay tax. The government’s Making Tax Digital (MTD) scheme aims to modernise the tax system by replacing annual tax returns with digital record-keeping and more frequent updates to HMRC.

The changes affect both sole traders and landlords – we’ve covered the changes for sole traders in our other guide, so here, we’re focusing specifically on landlords. 

Key takeaways

• If you’re a landlord and earn more than £50,000 a year in rental income, you must start using Making Tax Digital for income tax from 6 April 2026

• Under the rule change, you’ll need to submit quarterly submissions plus a final declaration each tax year

• You must make your submissions through MTD-compatible software

• You can sign up for MTD through the government website or ask your accountant to do it for you

What is Making Tax Digital for landlords?

Making Tax Digital is a government scheme that aims to digitise the UK tax system and ease the process of filing accurate tax returns. The idea is that it should save time and stress, and make it simpler to know how much to set aside each year for your tax bill. 

Under current rules, landlords only need to send one self-assessment tax return each year, and they can do this via the HMRC online portal, by post or through software. 

However, when the changes come into force, landlords will need to submit quarterly financial updates, including a summary of their business income and expenses. You can only do this from MTD-recognised software, meaning you can no longer use the online portal or submit a tax return by paper. After each submission, you’ll receive a tax estimate.

Quarterly updates must be sent by:

• 7 August

• 7 November

• 7 February 

• 7 May

You must also submit a final declaration each year by 31 January, which replaces the self-assessment tax return. You must pay the tax due by this date, too. 

When does Making Tax Digital for landlords start? 

The roll-out for MTD for landlords depends on how much you earn: 

• If you earn more than £50,000 a year from property income (and self-employment) before deducting expenses or taxes in your 2024-25 tax return, you must use MTD for income tax from 6 April 2026

• If you earn more than £30,000 a year from property income (and self-employment) for the 2025-26 tax year, you must use MTD from 6 April 2027

• If you earn more than £20,000 a year from property income (and self-employment) for the 2026-27 tax year, you must use MTD from 6 April 2028

How to get ready for Making Tax Digital 

To make sure you’re fully prepared for Making Tax Digital, we’ve compiled a handy checklist for landlords to follow:

1. Confirm if Making Tax Digital applies to you

You may have already received a letter from the government to inform you of the upcoming changes. This letter should include a QR code for you to scan to check whether the new system affects you. Alternatively, you can head to the GOV.UK website to use the government’s online service and assess whether the changes apply to you. 

2. Understand what will change

If MTD does apply to you, it’s important to understand what you must do to remain compliant. Remember that you must use MTD-compatible software to record financial transactions and submit quarterly updates as well as your end-of-year declaration. 

Your quarterly updates must include your property income and expenses for the previous three months, but they can be less detailed than your annual tax return. You also have the option of correcting any past information throughout the year.

In your final year-end declaration, you must also share details of other taxable income, including savings interest and investments. You can also claim relevant tax reliefs. 

3. Choose the right software

You can find a list of all the MTD-compatible software on the GOV.UK website. You may already be using this software, in which case, you don’t need to do anything. 

If you’re not, you may want to look for bridging software that connects your current accounting software to MTD-compatible software. This can be useful if you’d prefer to carry on using spreadsheets to manage your finances.

It’s also worth noting that some software types can submit both quarterly updates and your end-of-year tax return, while others can only do one.

4. Keep financial records digitally 

If you don’t already keep financial records digitally, it’s worth getting into the habit now so that you can iron out any issues before it becomes mandatory. 

Bear in mind that if you’re both a landlord and self-employed, you must keep separate records of your property and business income. 

5. Talk to an accountant

If you don’t already use an accountant, now might be the time to hire one. An accountant can help you understand more about your MTD requirements as well as submit your quarterly updates and tax return on your behalf. 

How to sign up for MTD as a landlord

You can sign up voluntarily for Making Tax Digital through the GOV.UK website – but note you still need to submit a self-assessment tax return for the 2024-25 tax year. Signing up early gives landlords a chance to familiarise themselves with the new system before they must officially use it.

To do this, you need your National Insurance number, the date you started receiving property income (if this is within the past two years), your accounting method and the tax year from which you want to start using MTD. You also need the user ID and password you used when you signed up for self-assessment.

If you have an accountant, they can sign you up for MTD on your behalf.