Making Tax Digital for landlords: the plain-English guide (2026/27)
Yes — if your gross property income (plus any self-employment income) is over £50,000, Making Tax Digital for Income Tax has applied to you since 6 April 2026. You must keep digital records, send HMRC quarterly updates through recognised software, and file a year-end final declaration.
Do landlords need Making Tax Digital?
It depends on your gross income — that is, rent before expenses, not profit. MTD for Income Tax became mandatory on 6 April 2026 for UK landlords and sole traders whose combined gross income from property and self-employment is over £50,000. HMRC contacted 864,000 sole traders and landlords ahead of the first deadline, so if you're in scope, HMRC has been contacting those in scope.
The threshold is dropping in stages:
- April 2026: over £50,000 — already mandatory
- April 2027: over £30,000
- April 2028: over £20,000
Two things catch people out. First, it's gross income, so a landlord with £52,000 of rent and £40,000 of expenses is in scope. Second, property and self-employment income are combined for the threshold test — £30,000 of rent plus £25,000 of freelance income puts you over £50,000.
What are the three MTD obligations?
MTD replaces the single annual Self Assessment return with three ongoing requirements:
- Keep digital records. Your income and expenses must live in software or a spreadsheet — not a paper notebook or a shoebox of receipts.
- Send quarterly updates. Four times a year, you send HMRC totals for each income and expense category through recognised software. Totals only — not individual transactions.
- File a final declaration. At year end, you confirm the full picture, make any adjustments, and finalise your tax. This replaces the Self Assessment return.
Quarterly updates are cumulative. Each one covers the tax year so far, so if you made a mistake in a previous quarter, it's automatically corrected in your next update. No resubmission, no correction form. That takes most of the fear out of the process.
And no — quarterly updates do not mean paying tax quarterly. Tax is still paid by 31 January (plus payments on account where they apply).
When are the MTD deadlines for 2026/27?
| Quarter | Period covered | Deadline |
|---|---|---|
| Q1 | To 5 July 2026 | 7 August 2026 (passed) |
| Q2 | To 5 October 2026 | 7 November 2026 |
| Q3 | To 5 January 2027 | 7 February 2027 |
| Q4 | Full year | 7 May 2027 |
| Final declaration + tax payment | 2026/27 tax year | 31 January 2028 |
These are the standard periods. There's an optional election to use calendar quarters (1 April–30 June and so on) if that fits your records better.
Penalties work on a points system: each late quarterly submission earns one penalty point, and at four points you get a £200 fine. Points expire after 24 months, so one slip won't haunt you forever — but a pattern of lateness will add up.
What trips landlords up? Four traps
1. Mortgage interest is not an expense
Residential property finance costs — mortgage interest and similar — are not deducted as an expense. Instead you get a 20% basic-rate tax credit, and these costs have their own category in the quarterly update. Putting mortgage interest in with your other expenses is the classic landlord error, and it overstates your deductions.
2. Repairs versus capital improvements
A like-for-like repair — replacing a broken boiler with an equivalent one — is allowable. A capital improvement — building an extension — is not. The line matters because only one of them reduces this year's taxable profit.
3. Joint ownership
If you own a property jointly, you report only your share of the income and expenses. Don't report the whole property's figures and hope it comes out in the wash.
4. Property plus self-employment means separate updates
If you have both rental income and self-employment income, each needs its own quarterly updates — separate submissions, on the same deadlines. That's eight updates a year, not four.
Also worth knowing: Rent-a-Room income and lease premiums have their own categories in the update, so keep them out of your general rent figure.
The MTD Quarterly Kit — Landlord Edition (£19) is a workbook (Excel and Google Sheets) built around HMRC's exact quarterly-update categories — including the separate residential finance costs line — with an automatic, cumulative Quarterly Update sheet that's digital-links compliant and bridging-software-ready. It comes with a "Submit in 20 Minutes" guide, deadline calendar, and free updates for 2026/27.
Spreadsheet plus bridging software, or an accounting subscription?
You do not have to buy accounting software. Spreadsheets are explicitly allowed as digital records, provided they connect to HMRC through recognised bridging software using digital links — your category totals must flow by formula or software link. Retyping or copy-pasting totals breaks the rules.
Bridging software does one job: it reads the category totals from your spreadsheet and submits them to HMRC via the API. You map your fields once, and it remembers.
| Route | Typical cost (as of mid-2026 — check current) | Best for |
|---|---|---|
| Spreadsheet + VitalTax | First submission free, then low-cost annual | Excel users — submission happens inside the spreadsheet |
| Spreadsheet + 123 Sheets | From roughly £30–50/yr | Established spreadsheet-first provider with landlord-specific options |
| Spreadsheet + Easy MTD | Pay-per-submission credits | Cheapest entry route |
| Spreadsheet + AbraTax | Free tier available | Google Sheets/CSV uploads, live tax estimates |
| Full accounting subscription | Typically £10–30/month (£120–360/yr) | Landlords who want bank feeds and an all-in-one platform |
For a typical landlord with a handful of properties, the spreadsheet-plus-bridging route usually costs a fraction of a subscription. HMRC's official list is on gov.uk under "Find software that works with Making Tax Digital for Income Tax". One more cost-saver: if your turnover is under £90,000, simplified "3-line accounts" reporting (income total, expenses total, profit) may be available.
What should you do this week?
- Check whether you're in scope. Add up gross rent plus any self-employment turnover. Over £50,000? You should already be running MTD. Under it? Note the £30,000 (2027) and £20,000 (2028) steps.
- Sign up if you haven't. Go to gov.uk and search "Sign up for Making Tax Digital for Income Tax", using the Government Gateway ID you use for Self Assessment. Some accountants will do this for you.
- Get your records digital. A spreadsheet with HMRC's categories is enough — set it up before receipts pile up.
- Pick a bridging tool from HMRC's list and connect it once.
- Put the deadlines in your calendar. The next one is 7 November 2026. The free MTD Deadline Pack is a calendar file with two-week warnings for every deadline, plus a one-page cheatsheet.
Frequently asked questions
Do landlords pay tax quarterly under MTD?
No. Quarterly updates are information only — totals per category for the year so far. Your tax for 2026/27 is still paid by 31 January 2028, plus payments on account where applicable.
Can I still use a spreadsheet for MTD?
Yes. Spreadsheets are allowed as digital records, as long as they connect to HMRC through recognised bridging software using digital links. Totals must flow by formula or software link — retyping them into another system breaks the rules.
What happens if I miss a quarterly deadline?
Each late submission earns one penalty point. At four points, HMRC charges a £200 fine. Points expire after 24 months, so an isolated slip is recoverable — but repeated lateness gets expensive.
My property is jointly owned — what do I report?
Only your share of the income and expenses. Each joint owner who is in scope reports their own share through their own MTD updates.
My rental income is under £50,000 — can I ignore MTD?
Not for long. The threshold falls to £30,000 in April 2027 and £20,000 in April 2028, and it's tested on gross income from property and self-employment combined. If you'll be caught by a later phase, starting your digital records early makes the switch painless. Check gov.uk for your position.
Want the setup done for you? The MTD Quarterly Kit — Landlord Edition (£19) gives you the workbook, submission guide, and deadline calendar in one download — or grab the Complete Bundle (£29) if you have self-employment income too and need both sets of quarterly updates.
This guide is general information, not tax advice, and buying our products does not create an accountant–client relationship. For your own position, check gov.uk or speak to a qualified accountant. We are not affiliated with HMRC. Published by Cunniffe & Helm Ltd (registered in England & Wales, no. 08990516), trading as MTD Quarterly Kit. Full terms: mtdquarterlykit.co.uk/legal.