Making Tax Digital for landlords is a government initiative aimed at modernising the UK tax system – shifting it from annual returns to a more digital, real-time setup.
Key Takeaways
- Landlords with rental income over £50k must follow MTD from April 2026 (£30k+ from April 2027, £20k+ from April 2028).
- Quarterly updates replace annual tax returns, using HMRC-approved software.
- Digital records are mandatory – no more spreadsheets or paper.
- Choosing the right software (Xero, FreeAgent, Hammock, etc.) makes compliance easier.
- Accountants can handle registration and submissions on your behalf.
If you’re a landlord earning income from rental property, Making Tax Digital (MTD) is about to change how you deal with HMRC.
Table of contents
- 1. What is Making Tax Digital for landlords?
- 2. When do you need to sign up for MTD as a landlord?
- 3. Making Tax Digital for landlords with multiple income streams
- 4. Making Tax Digital software for landlords: what landlords need (and how to choose)
- 5. FAQ: prepare for MTD with questions answered
- 6. Get MTD-Ready without the stress with WallsMan Creative
1. What is Making Tax Digital for landlords?
Making Tax Digital for landlords is a UK government initiative that changes how you report your income to HMRC.
If you’re a landlord, you must calculate your annual gross income by adding up your sole trade income plus your property income.
MTD changes how you handle your taxes and how you submit your tax return:
- You can’t keep paper records or spreadsheets alone: everything needs to run through compatible software.
- You’ll send updates every three months instead of one tax return per year.
- HMRC gets a clearer, more frequent view of your income, and you avoid last-minute tax stress.
Making Tax Digital doesn’t change your actual tax liability, as they stay the same; allowable expenses remain allowable; and you’ll still need to submit a final declaration after the year ends.
2. When do you need to sign up for MTD as a landlord?
Here’s how Making Tax Digital rolls out:
- April 2026 – This is the big one. From this date, landlords earning over £50,000 from rental and sole trade income will need to follow MTD for Income Tax.
- April 2027 – If your total income is between £30,000 and £50,000, the same rules will apply from April 2027.
- April 2028 – HMRC will lower the threshold for mandatory MTD to £20,000
What do you need to do if you hit the threshold as a landlord?
- Quarterly updates – You’ll need to submit an update to HMRC every three months through approved software. These aren’t full tax returns – just summaries of your income and expenses.
- Final declaration – At the end of the tax year, you’ll still send a final submission to confirm everything’s accurate and complete.
It might sound like a lot, but it’s really about shifting to little-and-often instead of one big scramble each January.
Make sure you check out our guide on Making Tax Digital timeline, so you’re always up-to-date about it!
| Note: Keep in mind that MTD for Income Tax and MTD for VAT are separate schemes. MTD for VAT doesn’t cover income tax, so you’ll need to register for MTD for Income Tax separately. |
3. Making Tax Digital for landlords with multiple income streams
If you’re a landlord with multiple income streams (multiple rental incomes + self-employment), Making Tax Digital still treats those income streams together.
HMRC looks at your total qualifying income, meaning the combined gross income from your rental and your self-employment. If that total goes over the MTD threshold for the year, you’re in the system.
Qualifying income is based on turnover, not profit. So even if your rental property barely breaks even, the full rent you receive still counts towards the threshold. Same goes for your business: HMRC uses your gross sales, not whatever’s left after expenses.
Jointly owned property
If you own a property with someone else, your share of the gross rent goes into your qualifying income total. Their share goes into theirs.
Each person who has received income from a jointly-owned property will need to report their share of income to HMRC.
MTD for non-UK residents
If you are not a UK resident, HMRC will only look at UK figures to calculate the threshold!
In this cases, your self-employed income from the UK + your property rental income from UK properties counts towards the threshold. In case you have properties outside the UK, you don’t have to count that in your gross UK income.
The key takeaway is simple: if your UK rental income plus business income takes you over the threshold for your year, you’ll need to follow MTD.
MTD for limited companies
Some income doesn’t count towards Making Tax Digital’s qualifying total.
If you hold a rental property inside a limited company, that income is outside the MTD rules completely, as that is subject to Corporation Tax.
4. Making Tax Digital software for landlords: what landlords need (and how to choose)
To comply with MTD, you’ll need to use HMRC-approved software – and that means moving away from paper records or spreadsheets.
Most modern tools also automate tasks like bank feeds, receipt scanning, and real-time income tracking – which means less manual input for you. If you’re already using accounting software, check if it’s MTD-ready. If not, you’ll need to switch or bolt on an approved add-on.
The software must be able to:
- Keep digital records of your rental income and expenses
- Connect directly to HMRC’s systems
- Submit quarterly updates and a final end-of-year declaration
There’s no one-size-fits-all here. The best software depends on how involved you want to be, how many properties you manage, and whether you’re working with an accountant.
Here are a few solid options:
- Xero – Clean, easy to use, and integrates well with banks and apps. Good if you want visibility and don’t mind a bit of setup.
- FreeAgent – Ideal for landlords who also freelance or run a small business. MTD-compliant and very user-friendly.
- Hammock – Built specifically for landlords. Tracks rent, mortgages, repairs – and does the MTD part in the background.
- Landlord Studio – Tailored to UK landlords. Offers rental tracking, document storage, and MTD compliance in one.
If you work together with an accountant, ask them which tools they support – we stand with Xero, and we can handle this change for you with that software, too. But feel free to check out other Making Tax Digital software for landlords.
5. FAQ: prepare for MTD with questions answered
It means you’ll need to keep digital records of your rental income and expenses, and submit quarterly updates to HMRC using approved software.
Yes, for landlords with income over £50,000 from April 2026, over £30,000 from April 2027 and over £20,000 from April 2028.
Not exactly. The aim is to reduce errors and improve tax accuracy – but it will make under-reporting harder.
That depends. Some prefer owning property through a limited company; others benefit more from keeping it personal. It’s best to speak to an accountant.
They cross-check data from letting agents, banks, and even online platforms. Algorithms help flag inconsistencies.
They might. HMRC gets data from payment platforms and third parties – if your income isn’t declared, it can raise red flags.
Yes – HMRC uses a points-based penalty system. If you miss a quarterly submission deadline, you get one penalty point. Once you reach four points, you’ll be fined £200. After that, every additional missed deadline triggers another £200 fine. Penalty points expire after two years if you stay compliant.
6. Get MTD-Ready without the stress with WallsMan Creative
Making Tax Digital doesn’t have to mean more admin – but it does mean new habits, new tools, and no more last-minute spreadsheets.
The sooner you get set up, the smoother the transition. Most landlords who start early find it easier to stay on top of things – and avoid fines down the line.
If you’re juggling rental income alongside creative work or a freelance business, WallsMan Creative can help you get everything sorted. We work with landlords like you to stay compliant, simplify the numbers, and take the pressure off tax season.
