Making Tax Digital for Landlords: What You Need to Know Now

Making Tax Digital for Income Tax is now a reality for many landlords. Since 6 April 2026, landlords and sole traders with qualifying income above £50,000 for the 2024/25 tax year have been required to use Making Tax Digital for Income Tax.

The first quarterly update for the 2026/27 tax year covered the period from 6 April to 5 July 2026 and was due by 7 August 2026. For landlords who fall within this first group but have not yet signed up, the requirement is already live and HMRC says they should sign up as soon as possible.

The requirement is also being extended. Landlords and sole traders with qualifying income above £30,000 for 2025/26 will need to use MTD from 6 April 2027, while those with qualifying income above £20,000 for 2026/27 will come into the system from 6 April 2028.

For landlords currently below the £50,000 threshold, understanding where their qualifying income sits is therefore an important planning step.

What Does Qualifying Income Mean?

Qualifying income is the total income from self-employment and property before expenses. For a landlord, this means gross rental income rather than taxable profit.

For example, a landlord receiving £35,000 in rental income may have a much lower taxable profit once allowable expenses are taken into account. For the purposes of the MTD threshold, however, the relevant figure is the gross income.

If someone has both self-employment and property income, these amounts are combined when determining whether they meet the relevant threshold.

HMRC has a service allowing individuals to check whether and when they need to use Making Tax Digital. Importantly, not receiving a letter from HMRC does not necessarily mean that the requirement does not apply.

What Does Making Tax Digital Actually Require?

There are three main elements to MTD for Income Tax.

First, landlords within the scheme need to be registered for Self Assessment and have submitted a tax return within the previous two years before signing up.

Second, they need to use compatible software to keep their records digitally and send information to HMRC.

Third, they need to submit quarterly updates. These are summaries of income and expenses rather than tax returns, and the information is submitted for each property or self-employment business.

The standard quarterly deadlines are:

• 6 April to 5 July – due by 7 August
• 6 July to 5 October – due by 7 November
• 6 October to 5 January – due by 7 February
• 6 January to 5 April – due by 7 May

The quarterly updates are cumulative, meaning each update includes information from the start of the tax year up to the end of that update period.

Quarterly updates do not replace the annual tax return. The tax return remains part of the process, with the deadline continuing to be 31 January following the end of the tax year.

Are There Any Exemptions?

There are exemptions from Making Tax Digital for Income Tax. These include certain people who are digitally excluded, where using digital technology is not reasonably practicable.

There are also other specific automatic and application-based exemptions, so anyone who believes they may qualify should check the current HMRC guidance rather than assuming they are required to use MTD.

What Should Landlords Do Now?

For landlords who will come into the scheme from April 2027, there is still time to prepare, but it is sensible not to leave everything until the last minute.

Reviewing your qualifying income, choosing compatible software and becoming familiar with digital record keeping can all be done ahead of the deadline. Starting early also gives you time to understand how the quarterly reporting process works and resolve any questions before MTD becomes mandatory.

For landlords already within the scheme, it is important to keep digital records up to date and continue submitting the required quarterly updates. HMRC has confirmed that there are no penalty points for late quarterly updates during the 2026/27 tax year, although the updates still need to be submitted and penalties continue to apply to late Self Assessment returns and late tax payments.

How Can John German Help?

Making Tax Digital adds another consideration to the ongoing management of a rental property. At John German, our lettings teams keep up to date with changes affecting landlords and can help with the practical management of your property portfolio.

If you are considering letting a property, expanding your portfolio or would simply like to discuss how our property management services work, our experienced lettings teams are here to help.

Thinking about letting your property? Get in touch with your local John German lettings team to discuss your requirements.

Click here to read the relevant GOV.UK Making Tax Digital guidance