HMRC Is Now Auto-Enrolling Landlords: What Making Tax Digital Actually Requires

Making Tax Digital for Income Tax became mandatory on 6 April 2026 for sole traders and landlords whose qualifying income was more than £50,000 in the 2024/25 tax year. More than 570,000 people had signed up and over 436,000 had submitted their first quarterly update by August 2026, according to HMRC.

Since September, HMRC has also started signing up people who should be using Making Tax Digital but have not registered themselves. This is happening in stages over the coming months. If you are affected, HMRC may contact you to let you know that you have been signed up.

Who is in scope?

The current threshold is more than £50,000 of qualifying income. This means total income from self-employment and property before expenses, rather than taxable profit. For example, a landlord with £55,000 of gross rental income can be within the rules even if allowable expenses significantly reduce their taxable profit.

Landlords who hold properties through a limited company are not subject to Making Tax Digital for Income Tax, although other tax and reporting requirements may apply.

The threshold falls to more than £30,000 from 6 April 2027, bringing more landlords into the regime.

What do the quarterly updates involve?

Landlords within the regime need to keep digital records and send four quarterly updates each tax year using compatible software.

For the standard tax-year reporting periods, the deadlines for 2026/27 are:

7 August 2026

7 November 2026

7 February 2027

7 May 2027

The updates are summaries of income and expenses rather than full tax returns. Importantly, they are cumulative: each update covers the income and expenses from the start of the tax year up to the end of that reporting period.

The Self Assessment tax return has not been replaced. The 31 January filing and payment deadline remains, and those using Making Tax Digital must send their quarterly updates before they can submit their tax return.

If HMRC has signed you up during the tax year, you will need to bring your digital records up to date and submit any missed quarterly updates. There are no penalties for late quarterly updates during 2026/27.

What happens if you miss a deadline?

There are no penalty points for late quarterly updates during the 2026/27 tax year, although the updates are still mandatory and need to be submitted. Penalties can still apply for late tax returns or late tax payments.

From 6 April 2027, the points-based system will apply to missed quarterly deadlines. Once four penalty points have been reached, a £200 penalty is charged, with a further £200 for each subsequent missed submission deadline.

What if HMRC has signed you up incorrectly?

There are exemptions in certain circumstances, including where someone is digitally excluded and it is not reasonable or practical for them to use digital services.

If you have been contacted by HMRC but believe you do not meet the qualifying income threshold, or you think you should be exempt, you should contact HMRC rather than simply ignoring the requirement.

Making Tax Digital represents a significant change for many landlords, but getting the right software and record-keeping process in place early can make the ongoing requirements much more manageable.

Talk to our lettings team about managing your portfolio and Making Tax Digital.