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Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is set to be implemented in April 2026. Here's what landlords need to know.
Written by
Ben Luxon
PUBLISHED ON
Sep 11, 2024
Making Tax Digital for Income Tax (MTD for IT) is the UK governments ambitious plan to modernise the UK tax system. Taxes will need to be filed digitally through an approved software and they are introducing quarterly submission requirements.
MTD is already in place for all VAT registered businesses and MTD for landlords is currently set to be phased in from Aprils 2026.
MTD represents a big shift in how the HMRC are expecting people to manage their finances and submit their taxes. There are a few things that you need to know and do to ensure you are prepared for the change and don’t get caught out or surprised when it is fully implemented.
From April 2026 and will affect landlords and self-employed individuals earning above the income threshold of £50,000.
And from April 2027 it will affect landlords and self-employed individuals earning above £30,000.
Related: Making Tax Digital For Landlords: The Comlete Guide
MTD for VAT is now a legal requirement for all VAT-registered businesses, regardless of turnover. Before 1 April 2022, businesses only had to comply with MTD for VAT rules if their taxable turnover exceeded the VAT threshold of £85,000.
MTD for ITSA has not yet come into effect but from April 6th 2026, all landlords and self-employed individuals with an annual taxable income of over £50,000 will be affected. As such, if you fall into this category you will be required to register and employ compatible software before this date (unless you are exempt).
You need to sign up for MTD for ITSA through your cloud-based software, instead of on the HMRC website. This means that you’ll need HMRC-approved software in place ahead of time.
If you’re unsure how to go ahead, you can ask your software provider or your accountant or bookkeeper how to sign up for MTD for ITSA. As for the details you’ll need, HMRC will request the following information:
If you’re looking for more information, HMRC’s guidance on signing up is a handy resource.
Under the MTD for ITSA rules, you’ll need to keep up-to-date digital records throughout the tax year. This includes all income for self-employment or your property investments, you will need to start keeping digital records from the beginning of the accounting period you are signing up for and keep them updated throughout this period as these records will need to be submitted quarterly to the HMRC using approved software.
Choosing the right property accounting software then is essential as the wrong one could heavily burden you, causing additional stress and challenges.
Landlord Studio offers simplified income and expense tracking, paired with powerful accounting tools and reporting. Easily keep your bookkeeping up to date with features like our receipt scanner which will automatically input the receipt details for you, bank feeds that allow you to view and reconcile transactions in real time, and our mobile app so that you can update your books wherever you are.
Landlord Studio will be directly integrated with the HMRC and MTD compliant well ahead of the April 2026 deadline.
In order to submit your tax return under the new MTD rules, you'll need up do date digital records and access to approved software.
Landlord Studio makes keeping digital records easy, and allows landlords to easily comply with MTD regulations through our Xero integration. Seamlessly sync all of your financial data to Xero to avoid double-handling of data and take advantage of Xero’s powerful customisable reports, then easily complete your quarterly returns and end-of-year statement.
Once MTD is implemented, you will need to send updates for each income source to the HMRC every 3 months. These updates are summaries of your business income and expenses.
These quarterly updates will need to be submitted within one month of the end of that quarterly period. If you don’t submit by this deadline, you may have to pay a penalty.
The standard quarterly periods and deadlines in each tax year are:
The quarterly submission deadline is a month later than the end of the quarter giving you an extra 30 days to update your books and get your acounts in order each quarter.
Alternatively, businesses can make a 'calendar quarter election,' which allows them to draw up quarterly updates to the end of the previous month. Where this election is made, the quarterly updates will be as follows.
The first quarterly updates under MTD for ITSA will therefore be due for filing by 7 August 2026 and will cover either the quarter ended 5 July 2026, or 30 June 2026 (where a calendar quarter election is in place).
Separate quarterly updates will be required for each trade or property business carried on by an individual. There is no requirement to make tax or accounting adjustments to the information provided in quarterly updates.
As well as quarterly updates, you'll need to provide a final declaration at the end of the tax year. You’ll submit an end-of-period statement for each income source. This is when you:
Once your final declaration is submitted, you’ll be able to see a tax calculation either in your software or in your HMRC account.
The deadline for submitting the end-of-period statements and paying any owed tax is 31 January after the end of the tax year. If you do not submit and pay by the deadline, you may have to pay a late submission penalty.
In order to prepare for the upcoming regulatory change, landlords need to start exploring software solutions sooner rather than later. The right software will offer easy-to-use accounting tools and allow you to update your accounts on the go via a mobile app.
Ultimately, this change is going to mean spending more time on bookkeeping throughout the year for many. Having a tool with time-saving features and automation will be invaluable in ensuring your books are accurate and your submissions are made on time.
Landlord Studio is an end-to-end property management and accounting solution designed for landlords. It offers easy income and expense tracking, a receipt scanner, and the ability to connect your bank account so that you can view and reconcile transactions in real-time.
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