This article explains everything you need to know about Making Tax Digital (MTD) for Income Tax as a landlord, including how it will impact you and what you’ll need to do to prepare for the changes coming into effect in April 2026.
Currently, only VAT-registered businesses with an annual turnover of more than £85,000 must maintain digital records and submit VAT returns via Making Tax Digital (MTD) compatible software. As of April 2026, this will extend to landlords and self-employed professionals. Keep reading, and we’ll explain the changes and what they mean for landlords and the self-employed.
What does Making Tax Digital mean for landlords?
From April 2026, landlords with an annual business or property rental income above £50,000 will have to comply with the MTD programme to record and file their self-assessment tax return. Landlords with a combined property and/or business income of £30,000 or more per year will have to follow the rules from April 2027.
If this applies to you, you’ll be required to send HMRC quarterly updates of your income and expenses via your HMRC digital tax account, and your tax is calculated in real-time. Instead of completing a self-assessment tax return on the 31st of January, you will sign a declaration that your quarterly returns are accurate and correct. You then have until the 31st of January the following year to pay your tax.
If you have multiple rental properties, you do not need to set up individual tax accounts. You can total the expenses and income for all properties in one digital tax account. Landlords and property investors earning less than £50,000 a year will not be required to set up a digital tax account. Similarly, landlords who take lodgers in their home under the Rent A Room Scheme do not have to set up a digital tax account.
How to prepare for Making Tax Digital
Under the new MTD rules, landlords will be required to submit quarterly returns over the year. It’s important to make a note of the dates you will be required to submit your information to ensure you do not incur a late submission penalty. While you won’t be expected to submit your receipts alongside your return, you will be required to store them digitally. To ensure you keep records and report your earnings correctly, we recommend switching to an MTD-compliant accounts system or landlord software with the required accounting capabilities.
For more information about MTD-compatible software, please visit the government’s website.
Landlords can now sign up for Making Tax Digital via the government’s website
If you would like to sign your business up for MTD, you can do so before April 2026 via the government’s website. Before you sign up, you must have software that’s compatible with MTD. You will also need the following information:
- Business name
- National Insurance Number
- Email address
- Accounting type such as cash or standard accounting
- Accounting period
You will also need the Government Gateway password and user ID you use when you file your self-assessment tax return. If you do not have a user ID, you can create one when you sign up.
Fusion Business Services is already supporting businesses with Making Tax Digital
Fusion Business Services is committed to supporting contractors and freelancers affected by the planned rollout of MTD for Landlords. Our accountancy software is already equipped to handle ongoing reporting, and we will ensure your records are stored and filed in line with MTD legislation.
Are you interested in finding out more about our landlord accountancy services? Please schedule a free consultation, and one of our expert consultants will be in touch to discuss your landlord accountancy options. Alternatively, please call us on 0800 2294020.
