Making Tax Digital for Income Tax (MTD for ITSA) is the end of the once-a-year Self Assessment for most landlords. From April 2026 it replaces the annual return with digital records and quarterly updates. Here is exactly who is affected, when, and what "getting ready" actually involves.
Who has to comply, and when
MTD is being phased in by income level. The figure that matters is your qualifying income — your combined gross income from property and self-employment, *before* expenses.
- April 2026 — qualifying income over £50,000 (measured in the 2024–25 tax year).
- April 2027 — qualifying income over £30,000.
- April 2028 — qualifying income over £20,000.
It's gross, and it's combined
Because the threshold uses gross income before costs, a highly geared portfolio with thin profits can still be over the line. And because property and self-employment are added together, a side business can tip you into MTD even if neither income source would alone.
What you actually have to do
- 1Keep digital records of property income and expenses in MTD-compatible software.
- 2Send HMRC a quarterly update — a running summary of income and expenses — four times a year.
- 3Submit a final declaration after the tax year end that confirms the figures and replaces your old Self Assessment return.
Penalties — and the first-year grace period
MTD brings a new points-based penalty system: miss a submission and you collect a point, with a fine once you hit the threshold. HMRC has confirmed it will not charge late-submission penalty points for quarterly updates during the first 12 months for those mandated from April 2026 — a soft landing, not a reason to ignore the deadlines.
Who is exempt
- Landlords below the relevant threshold (for now).
- Limited company landlords — incorporated portfolios pay corporation tax and fall outside MTD for Income Tax.
- A small number of genuinely digitally-excluded taxpayers, who must apply for exemption.
How to get ready
- 1Work out your qualifying income for 2024–25 and confirm which April you are mandated from.
- 2Stop relying on a shoebox and a spring spreadsheet — you need clean, categorised records all year round.
- 3Choose MTD-compatible software and connect your bank so income and expenses are captured as they happen.
- 4If you jointly own property, check each owner's share against the threshold separately.
How Rentwire helps
Quarterly reporting only hurts if your books are messy. Rentwire connects to your accounts through read-only Open Banking, matches rent to the right tenancy automatically, and keeps a categorised, always-current record of income and expenses. When a quarter closes you ask your AI assistant for the figures instead of reconstructing them from statements — turning four scary deadlines into four quiet ones.
MTD is less a tax change than a record-keeping change. The landlords who find it painless in 2026 will be the ones who moved to continuous, digital bookkeeping early — not those who try to digitise twelve months of receipts the week a quarter closes.
Frequently asked questions
- Does Making Tax Digital apply to me if I have one rental property?
- Only if your qualifying income (gross property plus self-employment income) is over the threshold for that year — £50,000 from April 2026, £30,000 from 2027, £20,000 from 2028. A single property can still qualify if the rent is high or you have other self-employment income.
- Is the £50,000 threshold based on profit or rent?
- Gross income before expenses, not profit. That means a heavily mortgaged property with little net profit can still take you over the threshold.
- Do limited company landlords need MTD for Income Tax?
- No. Companies pay corporation tax and are outside MTD for Income Tax. This is one reason some landlords consider incorporation, though it has its own costs and tax consequences.
This article is general information for UK landlords and letting agents, not legal, tax or financial advice. Rules change and individual circumstances differ — check the latest guidance from GOV.UK or a qualified professional before acting.