Making Tax Digital for Income Tax is now a matter that landlords must plan for and has already been implemented for those whose qualifying income exceeds the amount of ￡50,000, with this figure to be reduced to ￡30,000 as of 6 April 2027.
For those landlords who have not yet assessed whether the changes will impact them or not, it is now a good idea to see how the new rules will affect them.
As per HMRC, there were more than 436,000 sole traders and landlords who made their first MTD quarterly update submission for the 2026/27 tax year by August 2026. HMRC also announced that it would start to sign up eligible customers who have not enrolled until now as of September 2026.
What is Making Tax Digital for Landlords?
MTD for Income Tax is a modern method through which landlords and self-employed persons can record their financial transactions and file income and expense reports with HMRC.
Landlords who fall under the requirements of MTD must use compliant software to:
- Keep digital records of property income and expenses
- File Quarterly reports to HMRC
- Make any required adjustments
- File their final tax information
- Pay the required tax by the existing Self-Assessment deadline
The important point to note is that quarterly filings are not tax returns. It is just that HMRC gets summaries of income and expense information for the year, and the tax return filing process remains unchanged.
Does MTD Apply to Landlords With Income over ￡50,000?
As of 6 April 2026, MTD for Income Tax will be mandatory for persons whose total qualifying income exceeds ￡50,000 from self-employment, property, or both.
What matters in the case of landlords is that the threshold of ￡50,000 is calculated with reference to qualifying income rather than profit. According to HMRC, qualifying income is the total income from self-employment and rental income, before any deductions, based on the relevant tax return in the prior year.
Thus, for example, if you have total rental income from your rental properties of ￡55,000 and your allowable expenses make up the difference between qualifying income and your actual taxable profit significantly, you will still be required to comply with the rules of MTD.
The MTD Threshold Falls to ￡30,000 From April 2027
From 6 April 2027, any landlord or sole trader with qualifying income exceeding ￡30,000 will also need to file Income Tax via MTD.
The rollout will be done in Phases:
| Tax Year When Determining Qualifying Income | Qualifying Income | MTD Start Date |
| 2024/25 | More than ￡50,000 | 6 April 2026 |
| 2025/26 | More than ￡30,000 | 6 April 2027 |
| 2026/27 | More than ￡20,000 | 6 April 2028 |
Landlords with property income between ￡30,000 and ￡50,000 should never forget that MTD is not just a rule for those above the ￡50,000 limit.
What Should Landlords Do to Comply with MTD?
If you are within the MTD requirement, then there are a few things you have to do to comply.
- Maintain digital records
All information about your rental income and expenses must be kept digitally using the right software. This means if you are a landlord and you keep track of your accounts manually or by spreadsheets or using paper receipts, then you will have to adjust your record-keeping method.
It is important to maintain the records throughout the year and not try to keep track of everything just before filing a tax return.
- Using MTD compliant software
It is important to use MTD compliant software.
The software will be used to maintain your records and make quarterly submissions to HMRC.
- Make quarterly updates
Landlords should submit quarterly updates on their incomes and expenditures.
They will provide HMRC with information about the incomes and expenditures during the whole tax year, rather than having it at the year-end.
For 2026/27, HMRC confirms that there are no penalty points for the quarterly updates that are submitted late, even though late submission of tax return and payment are penalized. As of 6 April 2027, there are penalty points for missing quarterly deadlines.
- Go ahead with the final tax return
With MTD, the process of dealing with Self-Assessment for landlords has not been eliminated.
While quarterly updates are a requirement of the MTD regime, landlords still have to file their final tax returns and make necessary tax payments by the specified deadline.
What Should Landlords With Income Between £30k And £50k Do Now?
If you have currently received £30,000 – £50,000 as qualifying property income, then 2027 should be of concern to you.
You do not have to wait until the deadline comes before you start preparing. Getting your affairs in order now will afford you the following advantages:
- Evaluate your current bookkeeping system
- Verify qualifying income
- Organize rental income and expense information
- Select suitable MTD-compliant software
- Determine quarterly reporting requirements
- Consult an accountant if you are uncertain about your standing
Having everything ready prior to applying the rule will make things easier for you.
What If You Own Multiple Rental Properties?
Landlords with multiple rental properties might have to keep track of more complicated records. Records of rental income, costs related to owning property, mortgage interest details, repairs, professional fees, and other such transactions might have to be well-organised.
If there are several properties involved, keeping accurate records all through the year becomes crucial.
It should also be noted that the MTD threshold applies to qualifying income earned through property as well as self-employment. So, you will have to consider both these sources of income when deciding whether or not you have to abide by the MTD threshold.
MTD for Landlords: What Will Happen If You Do Nothing?
If you are within the MTD rules already, doing nothing is unlikely to help in any way.
HMRC has informed taxpayers that it will start enrolling its customers for the 2026/27 tax year from September 2026 if its records show that they should be using MTD. It encourages eligible taxpayers to enrol themselves so that they can prepare beforehand.
So, it is better to know if you are affected by MTD or not.
What Can An Accountant Do For MTD As A Landlord?
If you’re a landlord, then MTD doesn’t just mean pushing a button to report figures. Your books must actually be correct and in order.
This is where an accountant can help determine if you meet the income threshold requirement, check your bookkeeping procedures, select appropriate software, and make sure that you’re up-to-date on the latest rules.
Accountant services can be especially helpful if:
- You have more than one rental property
- Your income includes rental and self-employment
- You are making the transition from manual bookkeeping to digital accounting
- You are unsure how to calculate your qualifying income
- You want assistance with quarterly updates
- Your Self-Assessment requires help too
Why Choose Lexarox Accounts for MTD Support?
Lexarox Accounts is a great choice for landlords and other taxpayers in making the transition to Making Tax Digital with accounting assistance.
Lexarox Accounts offers bookkeeping and accountancy services, and our team will be able to assist customers with MTD, including digital record-keeping and quarterly digital submission services. We use cloud-based accounting services.
If you are a landlord who is going to cross the £50,000 or £30,000 threshold limit, then getting your accounts checked can really help you know where you stand and what needs to be changed.
If you need assistance with setting up a digital bookkeeping system or record management, and even quarterly submission, then you might find the help of an accountant useful.
Contact Details:
Address: Lexarox Accounts, MS. 128, 203-213 Mare Street, Hackney, London, E8 3JS
Tel: 0208 533 1358
Mobile: 0792 883 0368 / 0747 235 6282
Email: info@lexaroxaccounts.co.uk
Conclusion: Prepare for the Upcoming Deadline
The reduction of the £50,000 threshold in April 2026 to £30,000 from April 2027 implies that there will be more landlords who will fall within the scope of MTD for Income Tax.
In case your qualifying income exceeds £50,000, the legislation might be applicable to you now. In case you have earned more than £30,000 but less than £50,000, then April 2027 will be an important deadline.
It is always wise to take a look at your record-keeping and accounting arrangement before the rules start to bite. In doing so, you will have enough time to select appropriate software and arrange your property records.
If you are uncertain about your MTD obligations, then consulting an accountant will make the transition smooth and hassle-free.
Frequently Asked Questions
MTD for Income Tax – Does it apply to landlords?
Yes, MTD for Income Tax will be compulsory for all landlords who have a qualifying income level from 6 April 2026. From 6 April 2026, this is an amount that exceeds £50,000, dropping to more than £30,000 from 6 April 2027.
What is the MTD Threshold for landlords in 2026?
From 6 April 2026, landlords with a qualifying income exceeding £50,000 should use MTD for Income Tax.
When does the £30,000 MTD threshold come into effect?
The £30,000 threshold will come into effect from 6 April 2027, and it applies to sole traders and landlords with a qualifying income exceeding £30,000.
Is the MTD threshold based on profit?
No, the qualifying income level is based on income without deducting expenses, instead of the profit after expenses.
Does the landlord complete the Self-Assessment tax return?
Yes, the MTD quarterly update doesn’t take the place of the final Self-Assessment tax return. Therefore, the landlord should complete a tax return.
What software is required by landlords for MTD?
The software needed by landlords under MTD should be in compliance with Making Tax Digital for Income Tax. HMRC gives advice regarding the software for taxpayers.
