Making Tax Digital (MTD) for Income Tax is now live, bringing a new way for landlords to manage and report their tax.
If you receive income from property, this marks a shift away from the Traditional once-a-year Self Assessment towards a more regular, digital approach. While that might sound like more work, it’s really about spreading tasks across the year and gaining better visibility of your tax position as you go.
Here’s what you should already have in place, what happens next, and how to stay on track.
What you should have done already
If you fall within the scope of MTD, there are a few key steps you should already have taken.
1. Registering with HMRC
MTD for Income Tax applies from April 2026 if your gross property and/or self-employment income exceeds £50,000. This threshold is expected to reduce to £30,000 from April 2027.
If you meet the criteria, you’ll need to sign up with HMRC, MTD isn’t applied automatically, so registration is essential before you can start submitting updates.
2. Choosing compatible software
Landlords can no longer rely on manual records alone unless they are digitally linked to compatible software.
You’ll need a solution that allows you to:
- Keep digital records of rental income and expenses
- Submit updates directly to HMRC
- Maintain a clear digital audit trail
Even if your property portfolio is relatively simple, digital record-keeping is now a requirement rather than a choice.
3. Starting to keep digital records
You should now be maintaining digital records of your rental activity throughout the year.
This includes:
- Rental income received
- Letting agent fees
- Maintenance and repair costs
- Mortgage interest (where applicable)
- Dates and details of each transaction
Keeping records up to date rather than leaving it until January will make the process much smoother.
What happens next
With your setup in place, the focus shifts to maintaining accurate records and submitting quarterly updates.
Keeping your records organised
While you’ll likely categorise expenses (for example, repairs, insurance, or agent fees) within your software, it’s worth noting that HMRC won’t see this level of detail in your quarterly updates.
Categorisation is still useful because it:
- Helps you track profitability across your properties
- Keeps your records clear and consistent
- Makes your end-of-year review much easier
However, HMRC only receives overall totals, not a breakdown of each cost.
How quarterly updates work
Instead of submitting one annual tax return, landlords within MTD will send updates every quarter.
Each update includes:
- Total rental income for the period
- Total allowable expenses
These updates are designed to give HMRC a snapshot of your position, not a final calculation of your tax bill.
Quarterly deadlines to know
Most landlords will follow standard tax year quarters:
- 6 April – 5 July → deadline: 7 August
- 6 April – 5 October → deadline: 7 November
- 6 April – 5 January → deadline: 7 February
- 6 April – 5 April → deadline: 7 May
This gives you just over a month after each quarter ends to submit your figures.
Staying on top of these dates is key, especially as HMRC continues to develop its late submission rules.
What HMRC will see (and what they won’t)
A common concern for landlords is how much detail is being shared.
HMRC will see:
- Your total rental income
- Your total expenses
HMRC won’t see:
- Individual transactions
- How expenses are categorised
- Receipts or supporting documents
Your submissions are high-level summaries, but you’re still responsible for keeping detailed records in case HMRC asks for them.
What happens at the end of the year?
At the end of the tax year, you’ll complete a Final Declaration, where you confirm your overall tax position.
This includes:
- Total rental income across all properties
- Any adjustments (for example, disallowed expenses or reliefs)
- Other income sources, if applicable
For landlords entering MTD from April 2026, the deadline for this will be 31 January 2028.
Don’t forget your 2025/26 tax return
You’ll still need to complete a Self Assessment tax return for the 2025/26 tax year, due by 31 January 2027.
This means you’ll temporarily be working across both systems:
- 2025/26 → traditional Self Assessment
- 2026/27 → first year of MTD reporting
What happens if you make a mistake?
Mistakes are inevitable, particularly in the early stages of adopting a new system. The good news is that correcting them is straightforward.
Fixing errors in your records
If you notice something incorrect such as missing rental income or an expense recorded inaccurately, you can update your digital records at any time.
There’s no need to amend previous submissions in most cases.
Do you need to resubmit a quarterly update?
Typically, no.
Instead:
- Correct the error in your records
- Ensure it’s reflected in your next quarterly update
Because updates are cumulative, corrections naturally feed through.
What it means for your tax
After each quarterly update, you’ll usually receive an estimated tax position based on your rental income and expenses to date.
This can help you:
- Understand your likely tax bill earlier
- Set money aside gradually
- Avoid surprises at the end of the year
Keep in mind that this is only an estimate your final liability is confirmed after your Final Declaration.
Staying on track as a landlord
For many landlords, the biggest change is moving away from an annual admin task to a more regular routine.
To keep things manageable:
- Update your records regularly (monthly works well for rental income)
- Keep on top of property-related expenses as they arise
- Set reminders for quarterly deadlines
If you manage multiple properties, staying organised throughout the year will make a significant difference.
Final thoughts
MTD introduces a new way of working, but it also brings an opportunity to stay closer to your finances and avoid the usual January rush.
If you’ve registered, chosen the right tools, and started keeping digital records, you’re already on the right path.
From here, it’s about consistency, keeping records up to date, submitting your quarterly updates on time, and reviewing your position regularly.
With the right approach, MTD can become a straightforward part of managing your property income, rather than an added burden.
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