News & policy

Making Tax Digital for Landlords: It's Live Now — Are You Caught?

Tax & admin · 6 min read

While the headlines chase Budget rumours, a confirmed change has already quietly landed: Making Tax Digital for Income Tax is now mandatory for landlords above a certain income, and the threshold falls every year until most of us are pulled in. It's not a rumour, it's not "coming" — for higher-income landlords it's in force today, and the change it demands (quarterly digital record-keeping instead of one annual return) takes a bit of setting up. Here's what MTD is, whether it applies to you and when, and how to get ahead of it. This is general guidance, not tax advice — confirm your own position and the current thresholds on GOV.UK or with an accountant.

What Making Tax Digital actually is

MTD for Income Tax changes how you report rental income to HMRC. Instead of filing one Self Assessment return after the tax year, you keep your records digitally and send HMRC quarterly updates through compatible software, with a final declaration after year end that replaces the old annual return. The tax you owe doesn't change; the record-keeping and reporting rhythm does — from a once-a-year scramble to a steady, quarter-by-quarter routine. The whole point is digital, up-to-date records rather than a shoebox opened each January.

Who's caught, and when

MTD is being phased in by income level, and the threshold steps down each year — so even if you're not caught yet, you likely will be soon:

From April 2026 — income over £50,000. Already mandatory for landlords (and sole traders) whose qualifying gross income is above this level.
From April 2027 — income over £30,000. The threshold drops, bringing in a large tranche of ordinary landlords.
From April 2028 — income over £20,000. Lower again, sweeping in most remaining landlords.

The date you're caught depends on your income crossing the relevant threshold, so the practical question is simply: which band are you in, and from when? Check the definition and current thresholds on GOV.UK, because the rules on exactly what income counts — and any exemptions or deferrals — are set by HMRC and can be updated.

The trap: the threshold is based on your gross income — turnover before costs — not your profit. A landlord who only makes a modest profit can still be over the line on gross rents (plus any self-employment income), and be caught earlier than they expect. Don't assume a small margin means you're exempt — work it out from gross figures, and confirm on GOV.UK.

What changes day to day

If you're in scope, three things become part of your routine: keeping digital records of rental income and expenses as you go; sending quarterly updates to HMRC through MTD-compatible software; and submitting a final declaration after the tax year to confirm the full picture. The landlords who find this painless are the ones who were already keeping tidy, contemporaneous records. The ones who struggle are those used to reconstructing a year of receipts from memory each spring — that approach simply doesn't fit a quarterly cycle.

The honest bit: what software you need

Let's be clear, because it matters: the quarterly MTD filing has to go through HMRC-recognised, MTD-compatible accounting software (or your accountant's software). LandlordProof is not tax or accounting software and does not file your MTD updates — for the tax itself, use compatible software or an accountant, and check the recognised-software list on GOV.UK. What MTD and good property management share is a single discipline: keep your records digital, current and organised. Your figures live in your accounting tool; your compliance documents — certificates, licences, key dates, proof of what you served — belong somewhere equally organised, so that when your accountant, HMRC, a council or the coming landlord register needs something, you're not digging through inboxes.

What landlords should do now

Work out if and when you're caught — check your gross income against the thresholds and the dates above on GOV.UK.
Move to digital records now, even if you're not caught yet — a clean quarterly habit is far easier to start early than to retrofit under a deadline.
Choose MTD-compatible software or talk to your accountant about how they'll handle your quarterly updates.
Separate your money records from your compliance records, and keep both current — one for the tax return, one for everything a council or the register will ask for.
Don't leave it to spring — MTD rewards keeping up as you go, not catching up once a year.

MTD is part of a wider shift landlords are living through — more digital, more continuous, less "sort it out at the deadline." It sits alongside the tax changes we cover in what's confirmed versus what's just rumour, and the same record-keeping habit that satisfies HMRC is what a council relies on when it asks for your compliance records. Get organised once, digitally, and every one of these obligations gets easier.

Keep your compliance records as organised as your accounts

LandlordProof isn't tax software — but it keeps every property's certificates, licences and key dates digital, current and in one place, with reminders before anything lapses. So while your accounts go to HMRC, your compliance paperwork is always ready for a council, a tenant or the landlord register. Free for your first property.

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General guidance for UK landlords, not tax or legal advice. Making Tax Digital thresholds, dates, the definition of qualifying income, exemptions and compatible-software requirements are set by HMRC and can change — always confirm your own position and the current rules at GOV.UK and take advice from a qualified accountant. LandlordProof does not provide tax software or file MTD returns.