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We answer the most common questions about MTD for landlords, from when it's being phased in to how to register.
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Written by
Ben Luxon
PUBLISHED ON
Oct 4, 2024
Making Tax Digital (MTD) is a key part of the UK government’s effort to modernise the tax system, aiming to make it more efficient and easier to get your tax right. Under MTD for Income Tax Self Assessment (ITSA), landlords will soon be required to switch from traditional annual tax returns to submitting quarterly digital updates to HMRC.
Starting in April 2026, landlords with an annual income of over £50,000 will need to comply, followed by those earning over £30,000 from April 2027. This shift may feel like a big change, particularly for landlords not used to digital tax reporting, but preparing now can help ensure a smooth transition.
The following FAQs address common concerns about MTD for landlords, helping you understand the process, requirements, and how to prepare.
Related: Making Tax Digital For Landlords: The Complete Guide
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is part of the UK government's initiative to modernise the tax system, aiming to make it easier to file taxes accurately. Starting in April 2026, MTD for ITSA will require landlords and self-employed individuals earning over £50,000 annually to use compatible software for:
From April 2027, landlords earning over £30,000 will also need to comply with these rules. If you're unfamiliar with digital tax reporting, now is a good time to start preparing for this transition.
From April 2026, landlords with annual earnings above £50,000 will need to shift how they report income and expenses under the new Income Tax Self Assessment (ITSA) rules. The annual tax return will be replaced by quarterly updates and a 'Final Declaration.'
Filing taxes can be overwhelming, especially if you're new to the process. Our Self Assessment Tax Return guide can help you get started with confidence.
The rules for MTD for ITSA will apply from:
HMRC is still reviewing whether landlords earning below £30,000 will need to follow these rules, and we’ll keep you updated as this evolves.
To determine your income for MTD, you'll need to combine all your rental and sole trader earnings. For example, if you earn £50,000 from property alone or from a mix of property and business income, you must sign up for MTD for ITSA.
Landlords operating as limited companies should continue to submit company tax returns and financial accounts to both HMRC and Companies House.
Instead of submitting one annual return, MTD requires landlords to send quarterly updates via MTD-compliant software, covering income and expenses. In addition, a Final Declaration must be submitted by January 31 following the end of the tax year, where you will declare tax relief claims and additional income, such as savings or investments.
Joint landlords may submit expenses annually but must still report income quarterly. Less detailed records for jointly-owned properties may also be submitted, with more guidance available through HMRC.
No, income from the sale of a property falls under Capital Gains Tax, not MTD for Income Tax. You'll need to report and pay Capital Gains Tax within 60 days of the property sale.
MTD for ITSA applies to landlords earning at least £50,000 annually from rental income starting in April 2026. This includes buy-to-let properties, Furnished Holiday Lettings (FHLs), non-UK properties, and commercial properties. Joint landlords must comply if their share of the income exceeds £50,000.
From April 2027, the threshold will lower to £30,000, affecting more landlords who will need to follow MTD rules.
MTD for ITSA doesn't apply if you earn income through shares in a Real Estate Investment Trust (REIT) or operate as a limited company. Limited company landlords should continue to file company accounts and tax returns through the existing system.
To prepare for MTD, you'll need to:
Additionally, consider hiring a tax professional who specialises in landlord tax obligations to help ensure you stay compliant.
Landlords don't need to sign up for MTD for IT until the tax year starting 2026. However, you can sign up early voluntarily if you're registered for Self Assessment, are up to date with your tax returns, and are already uising a compatible software. Learn more about signing up early here.
Signing up early for MTD for ITSA can help you become familiar with the new reporting process. By using cloud-based accounting software now, you can smoothly transition to digital tax reporting for rental income and be fully compliant when the deadlines arrive.
To sign up voluntarily, you'll need to meet specific criteria and have MTD-compliant software.
For more details, consult the HMRC guidance on early registration here.
Yes. MTD for VAT and MTD for Income Tax are separate processes, so you'll need to register for each one individually. More information on MTD for VAT is available here.
Yes. MTD for VAT and MTD for Income Tax are separate processes, so you'll need to register for each one individually.
To comply with MTD, businesses must use compatible software that meets HMRC’s requirements. When choosing a software consider the following:
Landlord Studio will be directly integrated with the HMRC and MTD compliant well ahead of the April 2026 deadline.
Spreadsheets alone do not meet MTD requirements, but they can be used in conjunction with MTD-compatible bridging software. Here are the key points:
Consulting with a cloud-accounting expert can help you assess if switching to a more cost-effective solution would be beneficial.
MTD requires businesses to use compatible digital software that connects to HMRC via an API for submitting returns.
Manually re-keying figures into another package or spreadsheet is not allowed. However, during the first year of MTD, there is a ‘soft landing’ period where ‘cut and paste’ methods can be used to transfer data between software, but this will no longer be acceptable for VAT periods starting after 1 April 2020.
Yes, an accountant or bookkeeper can help you sign up for MTD for ITSA before the mandatory deadline. Consult with your tax professional for support in this transition.
Making Tax Digital offers significant benefits in terms of accuracy and efficiency, even if transitioning to digital accounting may seem overwhelming at first.
Read our Making Tax Digital For Landlords: The Complete Guide to learn more about MTD, process, timelines, penalties and requirements.
Making Tax Digital is transforming the way landlords manage their tax obligations, and staying compliant with these new requirements is crucial. Landlord Studio offers an all-in-one solution designed specifically for landlords, helping you manage every aspect of your property business— from income and expense tracking to tenant management to advanced financial reporting.
With MTD deadlines approaching, now is the perfect time to streamline your accounting processes with Landlord Studio. Save time, reduce errors, and stay ahead of evolving tax laws.
Simplify your rental property management and accounting and become MTD compliant today.
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Landlord Studio is an easy to use MTD compliant property management and accounting software designed for UK landlords.
Track income and expenses, run reports,, find and prescreen tenants, manage property maintenance, and more.
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