Making Tax Digital for Landlords: Who's In From 2026 and 2027

Making Tax Digital for Income Tax (MTD for ITSA) applies to landlords in stages, based on gross rental and trading income rather than profit. If your qualifying income was over £50,000 you are in from 6 April 2026; over £30,000 brings you in from 6 April 2027; and over £20,000 from 6 April 2028. Once you are in, you keep digital records, send HMRC a cumulative update every quarter, and finish the year with a final declaration instead of the familiar Self Assessment return.

• The test is gross rents, not profit — before expenses, mortgage interest or the £1,000 property allowance.
• Self-employment and property income are added together for the threshold test, even though they are reported separately.
• Joint owners are tested on their own share of the rent, and get a lighter touch on expenses in quarterly updates.
• Quarterly updates are cumulative year-to-date figures due on 7 August, 7 November, 7 February and 7 May.
• You need MTD-compatible software — HMRC does not provide a free filing tool, though bridging software lets you keep using a spreadsheet.

Thresholds and dates: when you are actually in

MTD for Income Tax is being phased in by income level. The figure HMRC looks at is your qualifying income: total gross income from self-employment plus total gross income from property, as reported on your Self Assessment return.

Two points catch landlords out. First, the test looks back: your 2026 start date depends on rents you already received in 2024/25, so there is nothing you can do now to change it. Second, HMRC writes to people it believes are in scope, but the legal obligation sits with you — a letter that never arrives is not an exemption.

What counts towards the threshold

Include the gross rent you are entitled to before any deduction: UK residential lets, commercial property, holiday lets, and overseas property income. Add gross turnover from any sole trade or side hustle. Then exclude things that are not trading or property income — employment earnings, pensions, dividends, savings interest and capital gains all sit outside the test, even though they still go on your final declaration.

Because it is a gross test, a heavily mortgaged portfolio can be firmly inside MTD while producing very little taxable profit. A landlord with £55,000 of rent and £50,000 of costs has £5,000 of profit and is still in from April 2026.

Worked example: two landlords, two start dates

Priya lets two flats. Gross rents in 2024/25 were £28,000 and £16,000, a total of £44,000. She also earns £38,000 in a salaried job. Her qualifying income is £44,000 — the salary is ignored. That is under £50,000, so she is not in from April 2026, but it is over £30,000, so she joins from 6 April 2027 provided her 2025/26 rents are still above £30,000.

Tom has one buy-to-let with £14,000 of gross rent and a freelance design business turning over £41,000. Added together that is £55,000 of qualifying income, so he is in from 6 April 2026 — and he must send separate quarterly updates for the trade and for the property business. Our MTD scope checker runs this test on your own figures, and the full Making Tax Digital for Income Tax guide covers the sole-trader side in more depth.

Joint owners and jointly let property

Jointly owned property is tested per owner, on their share, not on the property's total rent. That means a couple can be outside MTD for a year or two longer than a sole owner of the same portfolio.

Take a jointly owned house generating £60,000 of gross rent, split 50:50. Each owner has £30,000 of qualifying income. Because the 2027 trigger is income over £30,000, neither is caught by that stage — they would come in from April 2028 under the £20,000 threshold. A single owner of the same house, with the whole £60,000, is in from April 2026.

Where the split is unequal, use the actual profit-sharing proportions. A 75:25 split of £60,000 gives one owner £45,000 (in from April 2027) and the other £15,000 (outside MTD at all three announced stages, unless they have other trading or property income).

The easement for joint lets

HMRC has confirmed a simplification for jointly owned property: you can record and report your share of the income in your quarterly updates and leave the expenses out, supplying the expense figures once at the final declaration stage instead. You can also keep less transaction-level detail for the jointly held property than for a business you run alone.

Two practical consequences. If one joint owner is in MTD and the other is not, the person managing the lettings still needs to produce quarterly income figures for the one who is. And if you let through a partnership rather than as joint owners, partnerships are on a separate timetable and are not part of the 2026 or 2027 starts.

Quarterly updates: what you send and when

A quarterly update is not a tax return and not a payment. It is a summary of your property income and expenses, split into HMRC's categories, sent from your software. Standard quarters and deadlines are:

The periods overlap because updates are cumulative: each one restates the year to date. That is genuinely helpful — if you miscategorise a boiler repair in quarter one, you simply correct it in the next update rather than filing an amendment. You can also elect for calendar quarters (1 April to 30 June and so on), which suits anyone whose letting agent statements run to month end; the deadlines stay on the 7th.

Separate streams for separate businesses

UK property and overseas property are treated as different businesses, so they need separate quarterly updates. All your UK residential and commercial lets sit in one UK property business. Furnished holiday lets no longer have their own regime, so those rents now fold into the same UK property figures.

What does not change

Nothing about the tax itself changes. Rental profit is still taxed as non-savings income at your marginal rate — 20%, 40% or 45% in England, Wales and Northern Ireland, and at Scottish rates from 19% up to 48% if you are a Scottish taxpayer. Mortgage interest still gets the 20% finance-cost tax reducer rather than a deduction. Payment dates are unchanged: balancing payment by 31 January, payments on account on 31 January and 31 July. The year ends with a final declaration by 31 January, where you add everything else — employment income, dividends, savings interest, pension contributions, Gift Aid, capital gains — and confirm the figures. If you want a profit and tax estimate to sanity-check what your software shows, the rental income tax calculator does the arithmetic.

Penalties

Late payment penalties for taxpayers inside MTD are harsher than the old regime: broadly 3% of the outstanding tax at 15 days, a further 3% at 30 days, then an annualised charge from day 31. There is also a points-based regime for late submissions.

Software: what landlords actually need

HMRC does not provide a free tool for MTD for Income Tax, so you need MTD-compatible software that can hold your digital records and send updates through HMRC's API. There are three broad routes:

• All-in-one landlord or bookkeeping software — records each rent receipt and expense, categorises it, and files the quarterly updates and final declaration.
• Spreadsheet plus bridging software — keep your existing rent schedule and use a bridging tool to submit. Legitimate, provided the spreadsheet itself is your digital record and the figures pass across without manual retyping.
• An agent's software — your accountant files on your behalf, but the underlying records must still be digital.

Whatever you choose, the record for each transaction needs the date, the amount and the category. Paper receipts can stay paper — it is the record of the transaction that must be digital, not the invoice. Check any product against HMRC's official list of software compatible with Making Tax Digital for Income Tax, and check it handles the specific things landlords need: multiple properties, joint ownership shares, the finance-cost restriction and, if relevant, overseas property.

Exemptions and who stays out

Some people are outside MTD for Income Tax altogether:

• Landlords under the threshold. If your qualifying income stays at or below £20,000 once that stage arrives, you continue filing a normal Self Assessment return.
• The digitally excluded. You can apply for an exemption if using digital tools is not reasonably practicable — for example because of age, disability, religious belief or the absence of a reliable internet connection at your location.
• Trustees, personal representatives and certain other capacities. Income you report as a trustee or as the personal representative of someone who has died is not brought into MTD in the same way.
• Companies. If you hold property through a limited company you are outside MTD for Income Tax entirely — the company files a Corporation Tax return instead, at 19% on profits up to £50,000 and 25% above £250,000, with marginal relief in between.

Two more edge cases worth knowing. Income covered by the £1,000 property allowance still counts towards the qualifying income test, because the test is on gross receipts. And if you only let a furnished room in your own home under the Rent-a-Room scheme, with receipts inside the £7,500 limit, you may have nothing to report at all.

One useful safety valve: if your income later drops, you can leave MTD once your qualifying income has fallen below the threshold. HMRC applies a three-year look-back before you can exit, so a single quiet year between tenancies will not take you back out.

What to do next

Start with the gross rent figure on your most recent tax return, add any self-employment turnover, and compare it with the three thresholds. Run your numbers through the MTD scope checker to confirm your start date, then use the landlord tax check to see whether you are claiming everything you are entitled to on the rental side before the record-keeping rules tighten. If you also trade as a sole trader, the Making Tax Digital for Income Tax guide sets out how the two sets of quarterly updates fit together.