Making Tax Digital is now live for eligible UK landlords. Understand the income thresholds, digital records, quarterly deadlines and what to do if an update is overdue.
Last updated: 8 August 2026
Making Tax Digital for Income Tax is now live for the first group of UK landlords.
If your qualifying income was more than £50,000 in the 2024–25 tax year, you should have started using Making Tax Digital from 6 April 2026.
The first quarterly update deadline was 7 August 2026.
If you missed it, do not panic. HMRC will not apply a penalty for a late quarterly update during the 2026–27 tax year. However, you must still complete the update before submitting your annual return.
The next quarterly deadline is 7 November 2026.
This guide explains who must use Making Tax Digital, which income counts, what records landlords must keep and what to do if an update is overdue.
What is Making Tax Digital for landlords?
Making Tax Digital for Income Tax, often shortened to MTD, changes how eligible individual landlords keep property records and report information to HMRC.
If MTD applies to you, you or your accountant must:
Use MTD-compatible software
Maintain digital records of property income and expenses
Send four quarterly updates to HMRC
Review and correct the figures after the tax year
Add other relevant income, gains, allowances and reliefs
Submit one completed annual return through compatible software
Quarterly updates are summaries of your digital records. They are not four separate annual returns.
MTD also does not mean paying Income Tax four times a year. The existing Self Assessment payment timetable continues to apply.
Who must use Making Tax Digital?
You generally need to use MTD when:
You are an individual landlord or sole trader registered for Self Assessment
You receive property income, self-employment income or both
Your qualifying income exceeds the relevant threshold
You are not covered by an exemption
MTD is being introduced in stages:
| Qualifying income | Return checked by HMRC | MTD start date |
|---|---|---|
| More than £50,000 | 2024–25 | 6 April 2026 |
| More than £30,000 | 2025–26 | 6 April 2027 |
| More than £20,000 | 2026–27 | 6 April 2028 |
HMRC should write to landlords who need to use MTD. However, not receiving a letter does not remove your responsibility to check.
You can use HMRC’s official guidance to check if and when you need to use Making Tax Digital.
What counts as qualifying income?
Qualifying income is your total gross income from property and self-employment before expenses are deducted.
It is not your rental profit.
If you receive both property and self-employment income, the relevant gross amounts are normally combined.
Example
A landlord receives:
£39,000 in gross rental income
£13,000 in gross self-employment income
Their total qualifying income is £52,000.
The MTD threshold is exceeded even if repairs, insurance, letting-agent fees, mortgage finance costs and other expenses reduce the final taxable profit.
Income that normally does not count towards the MTD threshold includes:
Employment income taxed through PAYE
Dividends, including dividends from your own company
State Pension
Private pensions
Your share of partnership profit as an individual partner
These sources may still need to be included in your completed annual return.
HMRC provides further examples in its guidance on working out qualifying income.
What happens with jointly owned property?
If you jointly own a rental property, normally only your share of the property income counts towards your qualifying income.
For example, if a jointly owned property generates £50,000 in gross rent and you are entitled to an equal 50% share, your qualifying property income would normally be £25,000.
Only your share of the jointly owned property income and expenses needs to be included in your digital records.
Married couples and civil partners who live together are usually taxed on equal shares of jointly owned property income. Different treatment may apply where the ownership, beneficial entitlement and required declarations support another division.
Does MTD apply to property companies and SPVs?
MTD for Income Tax applies to eligible individuals. It does not apply in the same way to rental income earned inside a property limited company or SPV.
A property company continues to have separate responsibilities, including:
Corporation Tax
Annual company accounts
Companies House filings
Company bookkeeping and record-keeping
A company director may still need to use MTD personally if they receive qualifying rental or self-employment income outside the company.
Dividends received from the company do not normally count towards the director’s MTD qualifying-income threshold.
What must landlords do under MTD?
MTD creates four main responsibilities.
1. Sign up and authorise software
HMRC does not automatically complete the MTD sign-up process for you.
You or your authorised accountant must sign up and connect suitable MTD-compatible software.
If an accountant acts for you, they should use HMRC’s official agent-authorisation process. You should never provide an accountant or adviser with your personal Government Gateway password.
2. Maintain digital records
Your property income and expenses must be recorded and stored digitally.
Each digital record normally needs:
The amount
The relevant date
The correct income or expense category
3. Send quarterly updates
Your software uses the digital records to calculate totals for the relevant income and expense categories.
These totals are sent to HMRC every three months. You do not normally attach every invoice, receipt or bank statement to a quarterly update.
4. Complete the annual return
After the tax year ends, the records must be reviewed and corrected.
Any necessary accounting adjustments must be made, and other income, gains, allowances and reliefs must be included.
The completed annual return must then be submitted through MTD-compatible software.
What digital records must landlords keep?
Landlord digital records may include:
Rental income
Letting-agent statements
Repairs and maintenance
Landlord insurance
Service charges
Ground rent
Professional and management fees
Replacement domestic items
Mortgage-interest information
Advertising costs
Utilities paid by the landlord
Other property-related income and expenditure
The correct category still matters.
For example, a repair may be treated differently from a capital improvement. Residential mortgage finance costs for an individual landlord are also not handled like an ordinary property expense.
Software can organise transactions, but it cannot make every accounting decision correctly without proper review.
Can landlords continue using spreadsheets?
A spreadsheet may form part of an MTD-compatible system.
However, the spreadsheet must connect to suitable software that can send quarterly updates and submit the annual return.
If you use more than one software product, the products must be digitally linked. Manually copying and pasting records between unconnected products may not satisfy the requirements.
You can check HMRC’s guidance on creating digital records for MTD.
Simpler record categories
Landlords with total UK property turnover below £90,000 may be able to categorise their digital records in less detail.
Residential landlords must still identify restricted residential finance costs separately from other expenditure.
If turnover reaches £90,000 during the year, the records may need to be recategorised in full before an update can be submitted.
Supporting documents
Digital records do not remove the need to keep supporting evidence.
You should retain:
Invoices and receipts
Bank statements
Mortgage statements
Letting-agent statements
Tenancy information
Property purchase and disposal documents
Evidence supporting repairs or improvements
Digital records must normally be retained for at least five years after the 31 January submission deadline for the relevant year.
Is a separate quarterly update required for each property?
Normally, multiple UK rental properties owned by the same individual form one UK property business.
The records are generally combined into one UK property quarterly update rather than requiring a separate update for every property.
However, property-by-property bookkeeping is still valuable. It helps landlords:
Compare the performance of different properties
Identify missing rent or expenses
Understand the real cost of each property
Prepare more accurate annual figures
Make better portfolio decisions
Foreign property income is treated separately and may have different record-keeping requirements.
Quarterly deadlines for 2026–27
The standard quarterly periods and deadlines are:
| Period covered | Submission deadline |
|---|---|
| 6 April to 5 July 2026 | 7 August 2026 |
| 6 April to 5 October 2026 | 7 November 2026 |
| 6 April 2026 to 5 January 2027 | 7 February 2027 |
| 6 April 2026 to 5 April 2027 | 7 May 2027 |
The updates are cumulative.
For example, the second update covers the period from 6 April to 5 October. It does not cover only the three months since the previous update.
Landlords using a 1 April to 31 March accounting period may use calendar update periods. The period dates are slightly different, but the submission deadlines remain the same.
HMRC explains the periods in its official quarterly-update guidance.
What should you do if you missed the 7 August deadline?
HMRC will not apply penalty points for late quarterly updates during the 2026–27 tax year.
However, the update has not been cancelled. It must still be completed before the annual return can be submitted.
Follow these steps:
Confirm whether MTD applied to you from 6 April 2026.
Complete the MTD sign-up process if necessary.
Authorise suitable MTD-compatible software.
Create digital records from the beginning of the relevant accounting period.
Review the first-period income and expenses.
Submit the overdue update.
Continue recording transactions.
Prepare for the next deadline on 7 November 2026.
If you sign up partway through the year, you will normally need to catch up by creating digital records from the beginning of the relevant accounting period.
The first-year penalty concession gives landlords time to correct the situation. It is not permission to ignore the update.
What penalties apply?
There are no penalties for missing a quarterly update deadline during the 2026–27 tax year.
You must still:
Maintain the required digital records
Send all required quarterly updates
Complete the updates before submitting the annual return
Submit the annual return by the deadline
Pay the amount due on time
For quarterly updates after 2026–27, the late-submission system is points-based.
A missed quarterly deadline normally creates one penalty point. Reaching the four-point threshold can result in a £200 penalty. Further missed deadlines while you remain at the threshold can lead to additional £200 penalties.
You can read HMRC’s current MTD penalty guidance.
Annual return and payment dates
MTD does not remove the annual return.
The important transition dates are:
| Responsibility | Deadline |
|---|---|
| Submit the 2025–26 Self Assessment return | 31 January 2027 |
| Submit the first MTD annual return for 2026–27 | 31 January 2028 |
| Pay the 2026–27 balancing payment, where applicable | 31 January 2028 |
Before submitting the annual return, you must check that all relevant information has been included.
This may include:
Employment income
Interest and dividends
Pension income
Partnership income
Capital gains
Property disposals
Allowances and reliefs
MTD also does not remove payments on account.
Where payments on account apply, they are normally due on 31 January and 31 July. The July payment is part of the existing Self Assessment system, not an additional MTD payment.
Who may be exempt?
You may not need to use MTD for 2026–27 if:
Your 2024–25 qualifying income was £50,000 or less
The rental income belongs to a limited company
You only receive partnership profit
An automatic exemption applies
HMRC approves an exemption following an application
Some automatic exemptions apply in specific circumstances, including certain cases involving National Insurance numbers, supplementary Self Assessment pages and personal representatives.
A landlord may also apply for an exemption when using digital tools is not reasonably practical because of:
Age, health or disability
Religious beliefs
Lack of internet access because of location
Another circumstance that makes digital participation unreasonable
Being unfamiliar with accounting software or having only a small number of transactions is not normally enough by itself.
Check HMRC’s full MTD exemption guidance.
An exemption from MTD does not normally remove the need to report the relevant income through Self Assessment.
Landlord MTD checklist
Check whether you can answer “yes” to each relevant question:
Have I checked my gross property and self-employment income?
Do I know whether MTD applied to me from 6 April 2026?
Have I checked whether an exemption applies?
Have I completed the MTD sign-up process?
Is my software MTD-compatible?
Are my property records digital from the correct starting date?
Is jointly owned income recorded using my correct share?
Are residential mortgage finance costs identified correctly?
Have I submitted the first quarterly update?
Am I prepared for the 7 November deadline?
Are my invoices, statements and receipts stored safely?
Do I know whether payments on account apply?
Have I planned for the first MTD annual return due on 31 January 2028?
If you cannot answer these questions confidently, it is better to correct the process now before missing records begin to accumulate.
How Number One Accounting supports landlords
Number One Accounting focuses on the accounting needs of UK landlords.
Our MTD landlord package can include:
Checking when MTD applies
MTD registration and software support
MTD-compatible software
Digital record support
Basic bookkeeping
Property-by-property tracking
Rental income and allowable-expense reviews
Four quarterly updates
Year-end annual return support
Self Assessment and property pages
HMRC submission support
Residential property finance-cost support
The MTD package starts from £50 per month for up to three properties, including VAT.
The annual plan costs £480 per year when paid annually, equivalent to £40 per month.
Additional properties are available from £10 per month.
Clients receive a named account manager and a response within one working day. There are no long-term contracts.
If you missed the first quarterly update or are unsure whether MTD applies, dealing with it now will be easier than waiting until the next deadline.
Learn more about our MTD support for landlords or speak to a landlord accountant.
Frequently asked questions
Does every landlord need to use MTD?
No. For 2026–27, MTD generally applies to eligible individual landlords whose qualifying income was more than £50,000 in 2024–25 and who are not exempt.
Is the threshold based on rent or profit?
The threshold is based on qualifying gross property and self-employment income before expenses, not the final profit.
Will I be fined for missing the first quarterly update?
HMRC will not apply a quarterly-update penalty during 2026–27. However, you must still complete the overdue update before submitting your annual return.
Can my accountant manage MTD for me?
Yes. An authorised accountant can manage the software, digital records and quarterly updates as part of the agreed service.
You remain responsible for providing complete and accurate information.
Can I continue using a spreadsheet?
Possibly. The spreadsheet must form part of an MTD-compatible system and connect correctly to suitable submission software.
Will I need to pay Income Tax every quarter?
No. Quarterly updates do not create a new quarterly payment schedule. Existing Self Assessment payment dates and payments on account continue to apply.
When is the first MTD annual return due?
The first mandatory MTD annual return for the 2026–27 year is due by 31 January 2028.
This article provides general information only and does not constitute personal accounting or tax advice. Requirements can depend on individual circumstances, ownership arrangements, residence status and changes to HMRC rules. Information reviewed on 8 August 2026.