Making Tax Digital for Landlords: What It Means and How to Prepare

Making Tax Digital for landlords is one of the most significant changes to the way rental income is reported to HMRC in many years. Known formally as Making Tax Digital for Income Tax Self Assessment (MTD for ITSA), the new system will require many landlords to keep digital records and submit information to HMRC more frequently using approved software.

The changes are being phased in from April 2026, based on income thresholds, and while not every landlord will be affected immediately, many will need to prepare well in advance. This article explains what’s happening, who it applies to, and what landlords should expect next.

What’s Happened

MTD for ITSA is part of HMRC’s wider Making Tax Digital programme. For landlords, it replaces parts of the traditional Self Assessment process with a digital-first system.

Under the new rules, landlords with qualifying income from property (and/or self-employment) will be required to:

• Keep digital records of rental income and allowable expenses

• Submit quarterly digital updates to HMRC using compatible software

• Complete an end-of-year final declaration through that software

It is important to note that MTD for ITSA applies to property and trading income, not PAYE salary or pension income.

The rollout is staged:

• From 6 April 2026: landlords with qualifying income over £50,000

• From 6 April 2027: landlords with qualifying income over £30,000

• From 6 April 2028: government plans to extend MTD to those with qualifying income over £20,000 (based on 2026–27 income)

Landlords below these thresholds are not required to join MTD for ITSA at those stages.

Why It Matters

For affected landlords, MTD for ITSA changes both how often and how information is sent to HMRC.

Instead of submitting one annual Self Assessment return, landlords will need to follow a regular reporting cycle. Quarterly updates are summaries of income and expenses, followed by an end-of-year submission that finalises the tax position.

There are also practical and cost implications. HMRC’s published estimates suggest:

• For landlords earning between £30,000 and £50,000, average transitional costs of around £350, with ongoing annual costs of about £110

• For landlords earning over £50,000, average transitional costs of around £285, with ongoing annual costs of about £115

While simplified record-keeping is permitted for some landlords, digital record-keeping and software use will become unavoidable for those within scope.

There are also several common misunderstandings worth correcting:

• MTD for ITSA is not just an annual return; it includes quarterly updates

• It does not apply to everyone at once; it is phased by income level

• PAYE income does not count towards the qualifying income threshold

• Exemptions may be available for those who genuinely cannot use digital systems

Wellingborough Context

For local landlords in Wellingborough and North Northamptonshire, MTD for ITSA is likely to affect a wide range of small and medium-sized portfolio owners, particularly those with multiple properties or combined rental and self-employed income.

Many landlords locally already use letting agents or accountants to manage compliance, but MTD introduces a new rhythm of reporting that may require changes to existing processes. Understanding whether your rental income places you above a future threshold is a sensible first step.

Landlords who rely on professional support may also find it helpful to review how digital records are currently kept and whether systems in use will align with HMRC’s compatible software requirements. For those managing property portfolios locally, staying organised and informed will be key as the deadlines approach. Guidance and background on landlord responsibilities can be found on the Woodhead & Co landlord resources page:
https://woodheadandco.co.uk/landlords

What Happens Next

MTD for ITSA is confirmed policy, with clear start dates and thresholds already set out. For landlords, the next steps are practical rather than speculative.

Based on the confirmed requirements, landlords should consider:

• Identifying their likely start date by reviewing qualifying property and trading income

• Moving records into a digital format, if not already done

• Selecting MTD-compatible software well ahead of the first required submission

• Planning for quarterly updates, rather than a single annual return

• Reviewing exemption options if digital record-keeping is genuinely not feasible

For jointly owned properties, income is assessed based on each owner’s share, meaning co-owners may fall into different MTD start dates. This is another area where early clarity can prevent confusion later.

As April 2026 approaches, further operational detail may follow, but the core obligations are already set. Preparing early should help landlords avoid unnecessary disruption when MTD for ITSA becomes mandatory for their income band.

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Disclaimer
Information is correct at the time of writing and is based on verified sources. This article is for general information only and should not be taken as legal or financial advice. Readers should seek professional advice before taking action.