Get that sinking feeling every time you hear the words Making Tax Digital? You’re not alone. For many landlords, it sounds like more admin, more rules and more time spent dealing with HMRC instead of managing your properties.
Get that sinking feeling every time you hear the words Making Tax Digital? You’re not alone. For many landlords, it sounds like more admin, more rules and more time spent dealing with HMRC instead of managing your properties.
The good news? You’re not being forced to change everything overnight and you won’t need to start submitting quarterly tax updates just yet.
What you can do, though, is start preparing. And that preparation can make the eventual changes far simpler, calmer and far less disruptive.
What is Making Tax Digital (in plain English)?
Making Tax Digital (MTD) is HMRC’s plan to modernise how tax is reported. Instead of pulling everything together once a year in a stressful rush, landlords will gradually move towards:
- Keeping rental income and expenses digitally
- Sending regular income and expense summaries to HMRC
- Submitting a final tax position online at the end of the year
The aim is to reduce errors, make tax more predictable and avoid unexpected bills landing at the worst possible time.
When does this affect landlords?
Around 2.9 million self-employed people and landlords will be brought into Making Tax Digital for Income Tax between 2026 and 2028 roughly 42% of everyone currently filing a Self Assessment return.
The rollout is phased:
- April 2026: landlords earning over £50,000 per year
- April 2027: threshold drops to £30,000
- April 2028: threshold drops to £20,000
Even if these thresholds don’t apply to you yet, HMRC is already encouraging landlords to move away from paper records and spreadsheets and adopt digital record-keeping.
Building good habits now means the eventual switch will feel far less daunting and comes with benefits long before MTD becomes mandatory.
Why getting ready now is such a big advantage
Preparing early isn’t really about compliance. It’s about making your life easier.
Research shows many landlords and sole traders are still unprepared for digital tax changes. A large number still rely on paper records or spreadsheets, and nearly 70% are unaware of what’s coming.
Digital records aren’t just for HMRC they help you stay on top of your property finances. Here’s the difference preparation can make:
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Without preparation
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With early digital prep
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Lost or missing receipts
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Receipts safely stored
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Guessing allowable expenses
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Accurate, organised records
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Unexpected tax bills
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Real-time tax estimates
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Stressful January deadlines
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Calm, controlled finances
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Extra accountant costs
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Cleaner records, fewer fixes
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When Making Tax Digital does officially arrive, you’ll already know what’s required and feel far more in control of your rental income.
What do digital records look like?
You don’t need to be tech-savvy or an accounting expert. But you will need HMRC-recognised software.
Digital record-keeping software like Coconut helps landlords by:
- Automatically logging rental income
- Categorising allowable property expenses
- Storing receipts securely
- Updating your estimated tax position in real time
That means less paperwork, no complicated spreadsheets and a clearer picture of how your property portfolio is performing.
Who will benefit most?
While Making Tax Digital will eventually affect most landlords, digital records are especially useful if you:
- Own more than one rental property
- Manage expenses like repairs, maintenance and insurance
- Use a personal bank account for rental income
- Split time between self-employment and property income
- Need clear income records for mortgages or refinancing
For landlords, going digital isn’t just about staying compliant — it’s about removing friction, reducing stress and making rental income easier to manage year-round.
York Residential Landlord members receive a 15% discount off all Coconut plans!
Whether you're managing your finances solo or working with an accountant, Coconut takes the stress out of tax and helps you stay compliant.
From Self Assessment to MTD, Coconut’s got you covered!
?? Start your 14-day free trial today and get ahead of the MTD deadline
Our plans are there to suit your current needs – However, we recommend our combined plan giving you MTD compliance and the ability to file your 25/26 tax return – yes, that is still required even if in MTD!
To get 15% off for the 1st three months with our monthly plans or get 15% off our annual plans join York RLA https://www.yorkrla.co.uk/