Making Tax Digital for UK landlords: complete guide
From April 2026, landlords earning over £50,000 in rental income must use HMRC-recognised software to maintain digital records and submit quarterly updates instead of a single annual tax return.
Key thresholds & phases
MTD is rolling out in three phases based on qualifying income:
| Phase | Date | Income threshold |
|---|---|---|
| Phase 1 | April 2026 | £50,000+ |
| Phase 2 | April 2027 | £30,000+ |
| Phase 3 | April 2028 (expected) | £20,000+ |
How the threshold works
The threshold is based on your qualifying income — your gross property income plus any gross self-employment income, combined. This is calculated before deducting expenses.
PAYE employment income, pensions, and dividends do not count toward the threshold.
Quarterly submission requirements
You must submit four quarterly updates per year, plus a Final Declaration by 31 January:
| Quarter | Period | Deadline |
|---|---|---|
| Q1 | 6 April – 5 July | 5 August |
| Q2 | 6 July – 5 October | 5 November |
| Q3 | 6 October – 5 January | 5 February |
| Q4 | 6 January – 5 April | 5 May |
| Final Declaration | Full tax year | 31 January |
Digital records requirements
At minimum you must record: the date and amount of each rent payment, the date and amount of each allowable expense with a description, and the category of each expense.
Spreadsheets alone don't satisfy MTD requirements — you must use compliant software that can submit data to HMRC digitally.
Penalty structure
HMRC uses a points-based penalty system for missed submissions:
- Points 1–3: No financial penalty
- Point 4: £200 penalty
- Each subsequent missed submission: £200
Note: HMRC has confirmed that penalty points will not be issued during the first year of MTD (the 2026–27 tax year).
Exemptions
You may be exempt if you're below the income threshold, are digitally excluded due to age, disability, or location, are under insolvency procedures, or have a religious objection to electronic communication.
Special scenarios
- Joint ownership: Each co-owner's share counts individually toward their own threshold.
- Letting agents: You remain personally responsible for MTD compliance regardless of whether an agent manages the property.
- Overseas rental income: Counts toward your qualifying income threshold.
- Furnished Holiday Lets: Now treated as standard property income following changes in April 2025.
What to do if you're in scope
- Check your qualifying income from your 2024–25 Self Assessment return
- Choose HMRC-recognised software
- Begin keeping digital records now
- Submit your first quarterly update by 5 August 2026
Ready to get started?
Take our free 2-minute quiz to find out if and when MTD applies to you.
Check if MTD applies to youFrequently asked questions
Does MTD apply to me?
MTD applies if your gross rental income plus any self-employment income exceeds £50,000 from April 2026. Use our free quiz to check your status.
What counts as qualifying income?
Gross property income plus gross self-employment income — before expenses. PAYE income, pensions, and dividends do not count.
Can my accountant handle MTD for me?
Your accountant can assist, but MTD requires direct digital submissions from recognised software. You still need to maintain digital records.
What if my income fluctuates?
HMRC uses your previous tax year's income to determine whether you're in scope. If income drops below the threshold in a later year, you may be able to exit MTD.