Making Tax Digital for landlords

Check your position

Use the checker on this page for a quick, indicative answer. Nothing you enter is sent or saved. HMRC’s checker on GOV.UK, linked from ours, asks more about exemptions.

We rechecked the official guidance on 29 October 2026, after the 28 October 2026 Budget. HMRC has not yet updated it, and the Budget changes below still need new law.

Who needs MTD for landlords, and when?

You need to use Making Tax Digital for Income Tax if you are a landlord or sole trader registered for Self Assessment and your qualifying income is over the limit for the relevant tax year, unless you are exempt.

Each start date has its own tax year. HMRC checks your tax return for that year, not this year’s income.

How do the limits work?

The test is more than the limit, so exactly £50,000, £30,000 or £20,000 is not over it. The 2026/27 tax year runs until 5 April 2027, so any figure for it is still an estimate.

If your 2024/25 qualifying income was over £50,000, you should have started on 6 April 2026. You can still sign up.

HMRC writes to people whose tax return shows they are over the limit. Without a letter, it is still up to you to check whether and when you need it, and to sign up if you do. To sign up, you must be registered for Self Assessment and have sent a tax return in the last 2 years.

Once you use it, a lower income in one year does not let you stop. You can opt out after 3 tax years in a row below the relevant limit, or if you amend last year’s tax return so it falls below. For example, if you started in April 2026, you could opt out after 2028/29 if your qualifying income was £20,000 or less in each of 2026/27, 2027/28 and 2028/29.

What counts towards the limit?

Qualifying income is your total income from property and self-employment before expenses, not your profit. Mortgage interest, letting agent fees and repairs do not come off it.

Rent from all your properties is added to any self-employment turnover for the same tax year: £25,000 of rent and £27,000 of self-employment income make £52,000.

If you live in the UK for tax, rent from property abroad counts too. If you started letting part way through a tax year, work out what your rent would have been over a full year.

These do not count, but still go on your tax return:

• wages or a salary taxed through PAYE
• dividends, including dividends from your own company
• your share of profit from a business partnership
• the State Pension and private pensions

What if you own a property with someone else?

Only your share of the rent counts, not the whole property’s rent. Use the share you report on your tax return.

If you are only told your share after expenses, HMRC uses that figure. This rule is only for joint owners: rent from property you own alone counts before fees and other costs.

Worked examples

These examples are hypothetical and assume no exemption applies.

• Rent of £32,000 in 2025/26, with £28,000 of costs. Qualifying income is £32,000, not the £4,000 profit, so Making Tax Digital applies from 6 April 2027, unless an earlier year already brought you in.
• A salary of £80,000 and rent of £28,000 in 2025/26. The salary does not count, so qualifying income is £28,000: not over £30,000. If 2026/27 rent is over £20,000, Making Tax Digital would apply from 6 April 2028.
• Rent of £44,000 shared equally by two owners in 2026/27. Each share of £22,000 is over £20,000, so both may need Making Tax Digital from 6 April 2028.

Check whether Making Tax Digital may apply to you

Have your figures for each tax year from 2024/25 to hand.

What do landlords need to do?

Once Making Tax Digital applies to you:

1. Keep digital records of your property income and expenses in software that works with Making Tax Digital. All your UK properties count as one UK property business, so you do not need separate records for each. Property abroad needs separate records for each property.
2. Keep your bank statements, invoices and other original records, as you do now.
3. Send a quarterly update every 3 months for each business you have: your UK property business, any property abroad and each self-employment. Updates are summaries, not tax returns, and do not include individual receipts.
4. Submit your tax return through the software by 31 January after the tax year, with your other income such as wages, pensions, dividends or savings interest. For 2026/27, that is 31 January 2028.

MTD software, spreadsheets and help

You can use one software product or more. If you use more than one, such as a spreadsheet and bridging software that sends your figures to HMRC, they must be digitally linked: once a record has gone to HMRC, you must not retype it or copy and paste it.

HMRC’s software finder lists products that work with Making Tax Digital for Income Tax, but HMRC does not advise on particular products.

You can do this yourself or choose an agent, such as an accountant.

When are the MTD quarterly deadlines?

Each update covers the tax year so far, from 6 April, and you must send it even if nothing came in or went out.

If your accounting period runs from 1 April to 31 March, choose calendar update periods in your software before your first update. The deadlines are the same.

For a jointly let property, you only need records of your share, and your updates can show just the income. You then add the expenses after the tax year by resending your fourth update before your tax return. Property you own alone needs income and expenses in every update.

What are the penalties?

For 2026/27, HMRC does not give penalties for missing a quarterly update deadline. You still need digital records, and must send the updates before you can submit your tax return.

If you started in April 2026, missed quarterly updates get penalty points from 2027/28. If you start in April 2027, the law today also gives points from 2027/28. The Budget plans to give them no points that year. This is not law yet. Late tax returns get points every year, including for 2026/27. At 4 points you get a £200 penalty, then another £200 for each further missed deadline.

If you sign up before you have to, late quarterly updates are not penalised, but a £200 penalty applies at 2 points for late tax returns.

Late payment penalties and interest are separate from points. Late payment penalties apply to your balancing payment and to amounts due after an amendment or assessment, not to payments on account. Updates do not change when you pay: tax is due by 31 January after the tax year, and any payments on account by 31 January and 31 July.

Exemptions and cases that need advice

Some exemptions are automatic; for others you must apply. Some are permanent unless your circumstances change, others last until April 2027 at the earliest. If you are exempt, you still send a Self Assessment tax return.

If any of these applies, or your figures are unusual, use HMRC’s checker or talk to us.

• Qualifying income of £20,000 or less: HMRC treats this as an automatic exemption. A later rise can bring you in, and this alone does not let an existing user stop.
• No National Insurance number before the tax year starts: you are exempt for that tax year.
• Digitally excluded: you must apply. Examples HMRC gives: age, health or disability stops you using a computer, tablet or phone; you belong to a religious society or order whose beliefs rule out digital records, and you use none of these devices; or you cannot get internet access at home, at work or anywhere suitable nearby. Not enough on their own: filing on paper before, not knowing the software, having few records, or the time or cost.
• Residence pages (SA109), for example if you live abroad: if your 2024/25 return included them, you are exempt for 2026/27. The Budget plans to exempt people expected to be non-resident, and non-UK resident entertainers and sportspeople, until further notice. This is not law yet. Otherwise, MTD applies from 6 April 2027 if your 2025/26 qualifying income is over £30,000.
• Trusts and estates: trusts that send a trust tax return (SA900), and personal representatives of someone who has died, are exempt in that role, but your own income still needs checking.
• Partnerships: they do not need to use it yet; HMRC will set a timeline later. Your partnership profit share does not count, but your own rent or self-employment income can.
• Qualifying care relief, for example foster or kinship carers: if your 2024/25 return claimed it, you are exempt until April 2027 at the earliest. The Budget plans to exempt anyone eligible until further notice. This is not law yet.
• Other cases: some exemptions depend on your 2024/25 return, such as averaging relief, Blind Person’s Allowance or a power of attorney because you cannot give HMRC information yourself. See HMRC’s exemption guidance.

Budget changes affecting landlords

We recheck this after each Budget.

From 6 April 2027, property income has its own rates of Income Tax: 22%, 42% and 47%, set by the Finance Act 2026. The Budget plans to raise these to 24%, 44% and 49%. This is not law yet. Scottish and Welsh taxpayers have property rates set by the Scottish Parliament or the Senedd. Mortgage interest relief on residential lets is still a tax reduction, worked out at the property basic rate of 22% rather than 20%, with the same limits.

The furnished holiday lettings rules ended on 6 April 2025 for Income Tax and Capital Gains Tax. A holiday let is now part of your property business, and its takings count towards your qualifying income.

For Capital Gains Tax, Stamp Duty Land Tax and other Budget measures, see our Autumn Budget page. The rental income tax calculator shows what the property rates could mean for you.

How HCA can help

We work with landlords across the UK from Park House in Leeds. We prepare Self Assessment tax returns, including rental income, and can help you get ready for Making Tax Digital.

• Self Assessment tax returns, including rent from property you own alone or jointly.
• Capital Gains Tax and the 60-day return if you sell a UK property.
• A conversation about your start date if your figures, ownership or exemption are not straightforward.

Common questions

Your next step

Tell us how you own your property, whether you are also self-employed and which tax year you are unsure about. Call 0113 460 1786, email ask@hca-accountants.com or use our contact page.

We’ll agree the scope of support with you before work begins.

Related pages

• Self Assessment tax returns
• Rental income tax calculator
• Holiday let tax calculator
• Do I need Making Tax Digital for Income Tax?
• Capital Gains Tax
• Tax calendar
• Autumn Budget