Like many landlords, I’ve just been through the annual ritual of completing my tax return. It’s one of those tasks that brings everything into focus — income, expenses, and how property fits into the bigger picture. With that in mind, now feels like a good time to talk about Making Tax Digital for Income Tax and what it may mean for landlords over the next few years.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax is designed to move tax reporting away from annual paper-based returns and towards a more regular, digital system.
Instead of submitting one Self Assessment tax return at the end of the year, landlords and sole traders will keep digital records and send updates to HMRC throughout the year using compatible software.
When does it start?
From 6 April 2026, you will be required to use Making Tax Digital for Income Tax if:
- You are an individual registered for Self Assessment
- You receive income from property, self-employment, or both
- Your total qualifying income from these sources is over £50,000 per year
This threshold looks at gross income, not profit, so rental income before expenses is included.
Who does this affect?
This change is particularly relevant for landlords who rely on rental income as part of their overall earnings.
If you have one or more rental properties and your combined property and/or self-employment income exceeds £50,000, you will need to comply with Making Tax Digital for Income Tax from April 2026.
Landlords with lower income thresholds will be brought into the system at a later date, so it’s still worth keeping an eye on developments.
What will landlords need to do?
Under Making Tax Digital for Income Tax, you (or your accountant or tax advisor) will need to:
- Create, store, and maintain digital records of your property income and expenses
- Send quarterly updates to HMRC summarising that information
- Submit your final tax return through compatible software
- Pay any tax due by 31 January following the end of the tax year
HMRC will no longer accept manual records or paper-based returns for those within the scheme.
Software requirements
HMRC does not provide its own software for Making Tax Digital.
Instead, landlords must use accounting or record-keeping software that is compatible with the MTD system. There are a range of options available, from simple income-and-expense tools to more comprehensive accounting packages.
Choosing the right software will depend on factors such as:
- The number of properties you have
- Whether you manage your records yourself or use an accountant
- How comfortable you are with digital bookkeeping
HMRC’s 5-step approach
HMRC sets out five main steps to help individuals prepare for Making Tax Digital for Income Tax:
- Work out your qualifying income
This helps you confirm whether you need to join the scheme from April 2026. - Check when you need to start
HMRC provides an online tool to confirm if and when the rules apply to you. - Get compatible software
You’ll need software that can keep digital records and send updates to HMRC. - Sign up for Making Tax Digital
Registration must be completed before you start using the service. - Use Making Tax Digital throughout the year
This includes keeping digital records, submitting quarterly updates, and completing your year-end tax return.
Getting the right advice
While Making Tax Digital changes how information is reported, it does not change what can be claimed as allowable expenses or how tax is calculated.
Because everyone’s circumstances are different — especially where rental property is involved — it’s sensible to seek guidance from a qualified tax advisor or accountant to understand how this will affect you personally.
For official guidance, HMRC provides detailed and regularly updated information on Making Tax Digital for Income Tax on the GOV.UK website. Making Tax Digital for Income Tax for sole traders and landlords: step by step – GOV.UK