Making Tax Digital for Landlords
Our survival guide to the changes coming in for landlords.
Making Tax Digital (MTD) for landlords: Making Tax Digital (MTD) is a UK government initiative that requires individuals with qualifying property or self-employment income to keep digital records and send quarterly updates to HMRC using approved software. Find here our free guide to the changes for property landlords and self-employed individuals.
Making Tax Digital (MTD) for landlords: our free guide to the changes coming in for property landlords
Owners of UK rental property who live outside the UK are obliged to register for UK taxes whether any tax is due or not. The UK has Tax Treaties with over 130 other countries. These treaties generally include sections designed to prevent the same income being taxed twice. Usually the UK will tax UK rental income first and the other country will allow you to deduct the UK tax from the local tax up to an amount equal to the local tax. Tax Returns for the UK property landlord. British and EEA citizens living anywhere in the world, along with many other people living in the country of which they are citizens, are entitled to the UK “Personal Allowance”, a £0% rate band that means the first £12,570 of profit from rental may be free of tax in the UK, and profits between £12,570 and £50,270 are taxed at 20%. Higher rates apply to UK income in excess of £50,270 (2025-26 rates).
HMRC is revolutionising the way it collects information on property and self-employment income
Making Tax Digital marks the most substantial reform since HMRC first introduced Self Assessment over three decades ago.
In this section:
Making Tax Digital (MTD) for landlords: Making Tax Digital (MTD) is a UK government initiative that requires individuals with qualifying property or self-employment income to keep digital records and send quarterly updates to HMRC using approved software. Find here our free guide to the changes for property landlords and self-employed individuals.
What is Making Tax Digital?
Making Tax Digital (MTD) is a UK government initiative that requires individuals with qualifying property or self-employment income to keep digital records and send quarterly updates to HMRC using approved software. Its goal is to make tax reporting more accurate and efficient by supplementing—rather than replacing—the traditional annual tax return with regular, digital submissions.
Who will be affected?
MTD is being introduced gradually in a series of phased implementations, over the course of 3 years, giving taxpayers time to adapt to the new requirements.
When will it be my turn?
- From 6th April 2026
(Tax year 2026-27):
UK residents with a UK National Insurance number (NINo) and whose combined gross income from UK, overseas property, and/or self-employment exceeds £50,000 per year.
- From 6th April 2027
(Tax year 2027-28):
All taxpayers, whether UK or non-residents, with a UK NINo and whose combined gross income from UK, overseas property, and/or self-employment exceeds £30,000 per year.
- From 6th April 2028
(Tax year 2028-29):
All taxpayers, whether UK or non-residents, with a UK NINo and whose combined gross income from UK, overseas property, and/or self-employment exceeds £20,000 per year.
What are the changes?
Under MTD, qualifying taxpayers will need to:
- Maintain fully digital, end-to-end records seamless from the original transaction up to the filing with HMRC, with no manual re-entry of data.
- Submit quarterly digital updates to HMRC using MTD-compatible software (or bridging software for spreadsheets). So, from April 2026, the taxpayer will make submissions to HMRC 5 times a year instead of just once.
- Submit separate quarterly updates for each UK property business, each overseas property business, and each self-employment activity.
- Submit each update within 30 days of the quarter end (or 37 days if you opt for calendar quarters).
- Submit actual figures, as HMRC will not accept estimates.
- Continue completing annual tax returns.
The quarterly updates will report income and expenses using the same categories as the annual tax return (with a few minor changes). The annual return, still due by 31st January, will include income from other sources, other expenditure missed earlier in the year, claims for reliefs and other adjustments.
HMRC will not provide software for this process. Instead, the burden is on the taxpayer to find compatible software, learn how to use it and ensure they remain compliant at all times.
What will you need to do?
3-step approach
- Use recognised software to record income and expenses
- Send quarterly updates to HMRC from this software
- Submit your tax return by 31st January each year
This change will require a lot of adjusting to and we will be with you every step of the way.
We can maintain your digital records for you in a format that is compatible with the HMRC requirements, and file them quarterly ensuring the compliance and deadlines are adhered to. Or, if you are comfortable using Excel, you may opt to maintain your own records and submit the quarterly updates yourself, while we prepare your annual tax return as usual.
When will this take place?
The new structure begins on 6th April 2026 — but we all have to prepare for it NOW! There is a huge amount of work to be done, and HMRC has said the full penalty regime, albeit reformed, will apply from the outset.
What software is available?
We have said it before, but it is worth repeating: HMRC will not make any software available for taxpayers to file their quarterly data. The taxpayer will have to research and choose a piece of software of their choice, from a list of recognised providers.
Making Tax Digital (MTD) for landlords: Making Tax Digital (MTD) is a UK government initiative that requires individuals with qualifying property or self-employment income to keep digital records and send quarterly updates to HMRC using approved software. Find here our free guide to the changes for property landlords and self-employed individuals.
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