Making Tax Digital for Income Tax: What UK Landlords Need to Know in 2026
For many landlords, the way rental income is recorded and reported to HMRC is changing.
From 6 April 2026, Making Tax Digital for landlords began applying to individuals whose qualifying income from property and self-employment exceeds £50,000.
Rather than relying solely on an annual Self Assessment process, affected landlords need to keep digital records, use compatible software and provide regular updates to HMRC.
So, is your rental income affected by MTD, and what should you be doing now?
Here’s what landlords need to know.
What Is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax – often referred to as MTD for Income Tax Self Assessment – is HMRC’s new system for reporting income from self-employment and property.
If you fall within the rules, you will need to:
- Keep digital records of relevant income and expenses
- Use software compatible with Making Tax Digital
- Send quarterly updates to HMRC
- Complete your tax return through compatible software
This represents a significant change for landlords who may previously have maintained spreadsheets, paper records or gathered information together once a year for their accountant.
Hartley Fowler has previously explained the wider changes in its guide to Digital Tax and what is changing in 2026.
What Is the MTD Landlords Threshold?
The MTD landlords threshold is being introduced in stages.
You need to use Making Tax Digital for Income Tax:
- From 6 April 2026 if qualifying income shown on your 2024/25 tax return was more than £50,000
- From 6 April 2027 if qualifying income shown on your 2025/26 tax return is more than £30,000
- From 6 April 2028 if qualifying income shown on your 2026/27 tax return is more than £20,000
This means landlords who are not affected in 2026 may still come into the system over the following two years.
What Counts as Qualifying Income?
This is one of the most important parts of the rules.
Your qualifying income is your gross income before expenses from:
- Property
- Self-employment
If you receive income from both, the amounts are combined when determining whether you exceed the threshold.
For example, if you received £35,000 in gross rental income and £20,000 from self-employment, your combined qualifying income would be £55,000.
It is therefore important not to confuse qualifying income with your taxable profit after allowable expenses.
Landlords unsure how their property income should be treated can find further guidance through Hartley Fowler’s property tax accounting services.
Is My Rental Income Affected by MTD?
If you personally own and let property and complete Self Assessment for your rental income, MTD may affect you depending on your qualifying income.
The rules apply to individuals receiving property or self-employment income rather than simply to every person who owns a rental property.
Your personal circumstances matter, particularly if you:
- Have several rental properties
- Also receive self-employment income
- Jointly own property
- Receive overseas property income
- Have recently started or stopped letting property
If you’re uncertain whether HMRC Making Tax Digital 2026 rules apply to you, checking your most recently submitted tax return is a useful starting point.
What Does Digital Record Keeping Mean for Landlords?
Under MTD, affected landlords must create and maintain digital records of their property income and expenses.
Digital record keeping for landlords may include information such as:
- Rental income received
- Letting agent charges
- Repairs and maintenance
- Insurance costs
- Professional fees
- Other allowable property expenses
The records need to be held within, or transferred digitally into, software that works with Making Tax Digital.
That doesn’t necessarily mean abandoning every system you currently use, but you will need to ensure your accounting process meets HMRC’s digital requirements.
Moving onto suitable cloud-based accounting software can also make it easier to share up-to-date financial information with your accountant.
What Are the Quarterly Updates?
One of the biggest changes under Making Tax Digital for landlords is the requirement to provide HMRC with quarterly information.
These updates summarise the income and expenses recorded in your digital records during the relevant period.
Quarterly reporting doesn’t mean calculating and paying your full Income Tax bill four times a year. Your eventual tax position still needs to be finalised through the annual tax return process.
The important difference is that record keeping and reporting become much more regular throughout the year.
For landlords accustomed to gathering receipts and statements shortly before the Self Assessment deadline, this may require a significant change in routine.
Do Landlords Still Complete a Tax Return?
Yes.
MTD changes how information is recorded and submitted, but affected landlords still need to complete their Income Tax return and pay the tax due by the normal deadline.
Hartley Fowler’s Self Assessment tax return service can support landlords with reporting their property income and wider tax affairs.
What Should Landlords Do Now?
Even if you aren’t yet above the MTD threshold, it makes sense to prepare early.
Consider taking the following steps:
Check your qualifying income.
Review your gross property and self-employment income and establish when MTD is likely to apply to you.
Review your record keeping.
If you still rely heavily on paper records or disconnected spreadsheets, now may be a good time to modernise your bookkeeping.
Choose compatible software.
Make sure your chosen system can work with Making Tax Digital for Income Tax.
Keep records up to date.
Moving to regular bookkeeping now will make quarterly reporting easier later.
Speak to your accountant.
If you have multiple properties or more complicated income sources, professional advice can help ensure the transition is handled correctly.
Get Ready for Making Tax Digital
Making Tax Digital for landlords is one of the biggest changes to property income reporting in recent years.
For landlords above the £50,000 qualifying-income threshold, the rules have already begun. Further landlords will enter the system as the threshold reduces in 2027 and 2028.
Hartley Fowler works with landlords and property investors to manage rental income, Self Assessment and wider property tax obligations.
If you’re unsure whether MTD applies to you or need help moving to digital record-keeping, contact the Hartley Fowler team for advice tailored to your circumstances.