MTD for Landlords
Making Tax Digital affects you from April 2026. Here is what you need to know and what you need to do.
The Short Version
Making Tax Digital (MTD) means you need to keep digital records of your property income and expenses and submit them to HMRC quarterly through approved software. This is not optional if your property income exceeds £10,000 per year.
Who It Affects
MTD Applies to You If:
- Your rental income is £10,000 or more per year (across all properties)
- You currently file a Self Assessment tax return for property income
MTD Does NOT Apply to You If:
- Your rental income is below £10,000 per year
- You can join voluntarily but are not required to
What You Need to Do
Get MTD-Compatible Software
You cannot use spreadsheets or manual records anymore. HMRC requires you to submit through approved MTD-compatible software.
Approved options include:
- Commercial software: Xero, QuickBooks, Landlord Studio (property-specific)
- Free options: HMRC's own software (basic functionality)
Keep Digital Records
This does not mean taking photos of receipts. You need structured digital records of:
- All rental income received
- Business expenses incurred
- Any VAT if applicable
Submit Quarterly Updates
Instead of one annual tax return, you now file four quarterly updates:
| Quarter | Period | Deadline |
|---|---|---|
| Q1 | 6 April - 5 July | 5 August |
| Q2 | 6 July - 5 October | 5 November |
| Q3 | 6 October - 5 January | 5 February |
| Q4 | 6 January - 5 April | 5 May |
Each submission shows your total income and expenses for that quarter, not just the tax due.
Final Declaration
After your fourth quarter submission, you still file an annual return to confirm everything and pay any final tax due.
The Penalties Are Not Trivial
- First penalty: If you miss a quarterly deadline
- Additional penalties: If you continue to miss deadlines
- Interest charged: On late payments
Missing one quarterly submission could cost you a £400 initial penalty plus daily penalties.
MTD Checklist
Use this checklist to prepare for MTD:
- Check whether MTD applies to you (rental income £10,000+ per year)
- Research MTD-compatible software options
- Set up digital record-keeping (do not wait until March 2026)
- Ensure your software can link to your bank account for automatic transaction import
- Mark quarterly deadlines in your calendar: 5 Aug, 5 Nov, 5 Feb, 5 May
- Test the software before the first deadline
The Reality for Landlords
Are Prepared
Already using property accounting software
Are Behind
Know MTD is coming but have not started
Are Confused
Not clear on what they need to do
Based on forum discussions and market research among UK landlords.