Making Tax Digital for Landlords: What Changes from April 2026 and What You Need to Track
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) applies to landlords from April 2026. If your gross property income exceeds £50,000 per year, you are required to use MTD-compatible software, maintain digital records, and submit quarterly updates to HMRC. This guide explains who is affected, when the requirements apply, and what landlords need to do to comply. It is derived from HMRC guidance and the Finance Act 2021. It is not tax advice.
What is Making Tax Digital for ITSA
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is HMRC's programme to move self-assessment taxpayers — including landlords — from annual tax returns to digital record-keeping and quarterly reporting. MTD for ITSA applies to individuals filing Self Assessment returns. It does not apply to limited companies, which are subject to separate Making Tax Digital for Corporation Tax proposals not yet in force. Under MTD for ITSA, landlords must use HMRC-recognised software to keep dated records and submit quarterly updates, replacing the traditional single annual-only reporting workflow with quarterly digital updates and an end-of-year finalisation process completed through MTD-compatible software.
Who it applies to and when
MTD for ITSA is being introduced in phases based on gross income thresholds:
| From | Gross income threshold | Who must comply |
|---|---|---|
| April 2026 | Over £50,000 | Landlords and self-employed with combined qualifying income above threshold |
| April 2027 | Over £30,000 | Extended to landlords with gross income above £30,000 |
| April 2028 | Over £20,000 | Further extended to landlords above £20,000 gross income |
The threshold is based on combined gross income from property and self-employment — not profit, and not one source alone. The threshold is calculated on gross property income — your rental income before deducting expenses.
Each individual landlord is assessed separately for the threshold — including in jointly owned property, where each owner's share of the gross income counts towards their own individual threshold. If a property generates £60,000 in gross rent and is owned 50/50, each owner has £30,000 of property income for MTD threshold purposes. Always seek professional advice on how jointly owned properties affect your individual position.
Non-resident landlords should take specific tax advice — the interaction between the Non-Resident Landlord scheme and MTD for ITSA has implications that are beyond the scope of this guide.
It is not net profit. If you have both self-employment income and property income, both are combined to determine whether you meet the threshold.If your gross rental income is close to £50,000, you should calculate carefully. Even if your profit is modest, gross income above the threshold triggers the MTD requirement from April 2026.
Quarterly reporting requirements
MTD for ITSA has two distinct requirements: maintaining digital records throughout the year, and submitting quarterly updates to HMRC. Both are mandatory — it is not sufficient to keep paper records and digitise them at quarter end. Records must be maintained in digital form contemporaneously.
Under MTD for ITSA, landlords must submit four quarterly updates to HMRC each tax year. Quarterly update periods are fixed:
- 6 April to 5 July — deadline 7 August
- 6 July to 5 October — deadline 5 November
- 6 October to 5 January — deadline 5 February
- 6 January to 5 April — deadline 5 May
Each quarterly update must include a digital summary of income and expenses for that period — not a full tax return, but a running record. At the end of the tax year, a final declaration (completed through your MTD software) closes out the year, confirming the figures and incorporating any adjustments, reliefs, or allowances. This end-of-year finalisation step remains mandatory under MTD — it does not disappear.
Compatible software
You must use HMRC-recognised software to keep dated records and submit quarterly updates. HMRC maintains a list of compatible software products at GOV.UK. Options range from dedicated landlord accounting tools to general accounting software with MTD for ITSA modules.
Your software must be able to: maintain digital records of income and expenditure, connect to HMRC's systems via the MTD API, and submit quarterly updates and the final declaration. Spreadsheets alone do not qualify. Any spreadsheet-based workflow must connect through a compatible bridging solution listed by HMRC.
A list of compatible products is available at GOV.UK — always verify a product is on the approved list before committing to it.
What records to keep
MTD for ITSA requires landlords to maintain digital records of:
- All rental income received, with dates and amounts
- All allowable expenses, with receipts or equivalent evidence
- Records of capital expenditure on the property, relevant for tax adjustments at end of year
- Any adjustments or reliefs claimed
Records must be kept in digital form and must be capable of being submitted to HMRC via compatible software. Paper records alone are not sufficient under MTD for ITSA, though you may keep paper copies alongside digital records.
HMRC requires records to be kept for at least five years from the 31 January submission deadline for the relevant tax year.
What landlords must do now
- Calculate your gross rental income. If you are close to or above £50,000 gross (before expenses), you need to act before April 2026. If between £30,000 and £50,000, prepare now for the April 2027 threshold.
- Choose compatible software. Research HMRC's list of compatible MTD for ITSA software products at GOV.UK. Select and trial software before your mandation date — do not leave this until the last moment.
- Start keeping digital records. Even before your mandation date, transitioning to digital record-keeping now makes compliance smoother and reduces the risk of errors.
- Speak to your accountant. If you use an accountant, discuss MTD for ITSA with them now. Many accountants are already MTD-ready. If yours is not, factor this into your plans.
- Register with HMRC for MTD. You will need to sign up for MTD for ITSA through your Government Gateway account before you can submit. Check GOV.UK for the sign-up process.
Exemptions
Certain landlords may be exempt from MTD for ITSA requirements. Exemptions may apply where:
- Gross income is below the applicable threshold
- The landlord can demonstrate that digital record-keeping is not reasonably practicable (for example, due to age, disability, or lack of internet access in a remote location)
- The landlord is a practising member of a religious society whose beliefs are incompatible with using electronic communications
Exemptions are not automatic — you must apply to HMRC to claim an exemption. HMRC assesses applications on a case-by-case basis. Always seek professional advice if you believe you may qualify for an exemption.
Penalties for non-compliance
HMRC is introducing a points-based penalty system for MTD for ITSA. Under this system, each missed submission earns a penalty point. When points reach a threshold (four for quarterly filers), a fixed £200 penalty is charged. Points reset after a period of compliance.
Late payment of tax due continues to attract interest and financial penalties and in some cases Rent Repayment Orders — see our landlord penalties guide. MTD for ITSA does not change the underlying tax liability — it changes how and when it is reported and paid.