April 2026 is the earliest start date for Making Tax Digital for income tax self-assessment. Also known as MTD for ITSA, this is part of a wider move by HMRC to modernise the way we pay our tax and increase accuracy. How early Making Tax Digital applies to you depends on the combined income from your property and any sole trader income you might earn.
These are the start dates:
- April 2026 for landlords earning £50,000 or more
- April 2027 for landlords earning £30,000 or more
- There’s no start date yet for landlords earning above £20,000
While Making Tax Digital for income tax applies to both sole traders and landlords, in this guide, we’re focusing on the specific challenges for landlords and what you need to do to get started.
Making Tax Digital for Landlords: The Basics
Making Tax Digital for income tax self-assessment is part of a wider strategy by HMRC to reduce the tax gap. In 2022-23, HMRC only collected 95.2% of the tax that was due, which is why they’re now prioritising digital records to reduce errors and make tax reporting simpler.
As a landlord, Making Tax Digital will mean switching from your annual tax return to providing quarterly updates to HMRC through your bookkeeping software. You’ll also need to submit additional information at the end of each tax year.
While MTD for landlords can feel intimidating, especially if you still rely on spreadsheets, the good news is that switching to digital bookkeeping will also give you clarity over your income. If you already use cloud-based software, you’re in the best place to get started.
What Do Landlords Need to Do for MTD?
Once your start date has passed, or earlier if you choose, you’ll need to do the following to comply with Making Tax Digital:
- Choose cloud accounting software recognised by HMRC.
- Keep up-to-date records of your property income and expenses.
- Submit a quarterly summary of your income and expenses to HMRC.
- File your Final Declaration to confirm your taxable income and pay any tax owed before 31st January.
- Store your records for at least five years following each tax year.
Switching over to cloud accounting software is not only essential for MTD, but can also give you important oversight of your property income.
What Income Streams Do I Need to Include for MTD?
It’s worth noting that not all property income counts for Making Tax Digital. When working out your start date for MTD, here are the income streams you need to include:
- Rental income from residential or commercial property in the UK
- Rental income from holiday lets
- Income from properties overseas
- Any other income earned by you as a sole trader
On the other hand, here are the income streams that don’t qualify:
- Lodger income from the Rent a Room Scheme (as long as you’re below the tax-free threshold)
- Non-taxable income like grants and allowances.
- Income from the sale of a property which is reported under Capital Gains Tax
- Salary from your job
- Pension income
- Investment dividends or income
If you’re unsure about your categorising your income streams, or need the extra support to make sure your MTD reporting is compliant, our team of accountants can help. We offer specialist property financial guidance and support for landlords.
While almost all rental income is included under MTD, it’s worth noting that lodger income from the Rent a Room Scheme doesn’t qualify.
Making Tax Digital Software for Landlords
As a landlord, Making Tax Digital means you’ll need to switch over from spreadsheets or paper records to cloud-based software recognised by HMRC. We’ll usually recommend Xero or QuickBooks to our clients.
Even with a year to go till your MTD start date, it’s a good idea to set up your cloud-based software early so you have time to adjust to it. If it’s your first time using them, you’ll also find cloud-based tools helpful for managing your property income. Your bank transactions, bookkeeping and tax returns can all be fed into the software and receipts stored, making it easy to get clarity over your finances.
How do Landlords Sign Up for Making Tax Digital?
If you’re already registered for self-assessment tax returns and have your cloud-based accounting software set up, you can sign up for HMRC’s MTD for Income Tax pilot programme whenever you want. You can do this via your HMRC account, making sure to link your software, or your accountant can do it for you.
While you don’t need to sign up for MTD until your individual start date, signing up early can give you a chance to get used to the new reporting and some leeway in getting the information you need to be compliant.
Your accountant can guide you in the transition to MTD. At Lumin Accountancy, we’re specialists in supporting landlords.
Making Tax Digital for Landlords: Frequently Asked Questions
Here are answers to some of the common MTD questions we get asked by the landlords we work with:
What About MTD for Joint Landlords?
If you co-own a property with another landlord, each of you will need to report your property income separately. Your income and expenses will be based on your share of ownership.
What if I’m Registered as a Limited Company?
If you’re a landlord registered as a limited company, Making Tax Digital for income tax self-assessment doesn’t apply to you. You’ll send limited company accounts and tax returns as before to HMRC and Companies House. If you’re considering this, we’ve shared the pros and cons of registering as a limited company.
I’m Selling My Property. Does This Count Under MTD?
Income from selling your property doesn’t fall under MTD for ITSA. Instead, you’ll need to report this income under Capital Gains Tax and pay any tax owed within 60 days.
When Will MTD Come for Small Landlords?
Small landlords earning below £30,000 don’t yet have a start date for Making Tax Digital. Your accountant will keep you updated on when you have to adapt to MTD. In the meantime though, it’s worth becoming familiar with cloud accounting software to streamline your bookkeeping and futureproof your accounts ahead of any HMRC changes.
Next Steps to Prepare for MTD for Landlords
We hope this guide has given you an understanding of when Making Tax Digital starts for landlords and what you need to do to prepare.
If you’re a landlord preparing for MTD, here are some basic next steps you can follow:
- Calculate your taxable income under MTD for ITSA.
- Use this to confirm your MTD start date, whether in April 2026, 2027, or beyond.
- Speak to your accountant for support making the transition to MTD for landlords.
- Set up your cloud-based software (best done with your accountant’s support).
- Switch over to digital bookkeeping.
How We Can Help
The simplest way to handle Making Tax Digital as a landlord is to work with an accountant to set up your cloud software and handle your tax returns.
At Lumin Accountancy, we’re specialists in landlord accounting, helping manage tax and property investments, giving you expert guidance and clarity on the world of real estate. Find out more about our services for landlords, or get in touch to learn how we can support you through the transition to Making Tax Digital.
