A Closer Look at MTD for IT Requirements: How to Comply

Making Tax Digital for Income Tax (MTD for IT) is reshaping the way landlords and self-employed individuals report their income to HMRC. From April 2026, landlords earning over £50,000 will need to keep digital records and use HMRC-recognised software to submit tax updates.

This article takes a closer look at the key requirements of MTD for IT, including the software you must use, how to maintain digital records, and what steps you need to take to stay compliant.

Overview: Key Requirements of MTD for IT

To comply with MTD for IT, landlords must:

1. Keep Digital Records – All income and expenses must be recorded digitally in an MTD-compatible format.
2. Use MTD-Compliant Software – Landlords must use HMRC-recognised software for submitting tax updates.
3. Submit Quarterly Updates – Taxpayers must report income and expenses every three months.
4. Submit a Final Declaration – This replaces the traditional Self Assessment tax return.

Keeping Digital Records Under MTD

Under MTD, landlords must store tax-related records digitally. This includes:

• Rental income received
• Rental business-related expenses
• Property maintenance costs
• Mortgage interest deductions (if applicable)

Landlords should also digitise their supporting documents (eg. receipts) - while you won’t be required to file these along with your quarterly submissions, you are still required to keep these for at least 5 years after the end of the tax year the tax return is for

Digital records must be stored securely and updated regularly using compliant software. Spreadsheets alone will not meet the requirements unless they are linked to the MTD system via a bridging software.

Using MTD-Compliant Software

HMRC requires landlords to use MTD-recognised software to manage their digital records and submit tax returns. The right software should allow you to:

• Keep up to date digital records of all of your rental income and expenses.
• Generate reports to simplify tax filing.
• Submit quarterly updates directly to HMRC.

Landlord Studio is an example of MTD-ready software designed specifically for landlords. It enables easy tracking of rental income, automated expense categorisation, and will be directly integrated with the HMRC’s MTD systems before the 2026 deadline.

Quarterly Updates and Final Declaration

Unlike the traditional annual Self Assessment, MTD requires:

📅 Quarterly Updates – Every three months, landlords must send a summary of income and expenses to HMRC.
📅 Final Declaration – This is the final submission, replacing the old Self Assessment tax return.

Missing any of these deadlines could result in penalties.

We explore Quarterly Updates and Final Declarations more detail in the next section →

Steps to Ensure Compliance with MTD for IT

To prepare for MTD for IT, landlords should:

1. Choose MTD-compliant software early.
2. Organise digital records to ensure tax data is accurate.
3. Familiarise yourself with quarterly reporting deadlines to avoid penalties.
4. Prepare yourself for your Final Declaration.

Finding a software that suits your needs now will help you make the transition as painless as possible. It’s also a good idea to get into the habit of updating your records on a regular basis if you don’t already. This means sitting down once a month or even more frequently and going through your finances to make sure every piece of income and every expense is accounted for. 

With Landlord Studio your rental accounting is made easy. Use our mobile app to log expenses as they happen - so there’s no massive admin task at the end of each quarter. Plus, you can digitise receipts on the go. Simply scan the receipt with your phone and Landlord Studio will read the receipt details and input the expense for you.

Landlord Studio also allows you to connect your bank accounts so you can review and reconcile transactions in real-time to ensure you never miss an expense. 

By automating as much of the digital record-keeping process as possible with software designed specifically for you, you can can avoid last-minute stress and ensure a smooth transition to MTD.

Final Thoughts

MTD for IT requires landlords to adopt digital record-keeping and quarterly tax submissions. By choosing the right software and maintaining organised financial records, landlords can stay compliant and simplify their tax process.

In our next article, we’ll explore MTD for IT Quarterly Updates and Final Submissions in detail.