Making Tax Digital for Landlords Guide

Making Tax Digital for landlords is HMRC's initiative to put tax for property investors online.

The system - called MTD for short - aims to simplify tax reporting for the self-employed and private landlords.

MTD is nothing new, as thousands of businesses paying VAT have already moved over to the digital tax platform.

Now, HMRC wants to move landlords onto MTD in a phased roll-out that will take several years.

Which landlords are affected by MTD?

Any landlord who reaches the MTD qualifying income level must keep records and file digital income tax returns. The platform is for individuals, not companies, which are unaffected by the new rules.

Qualifying income is a landlord's gross income (i.e., before expenses and tax are deducted) received in a tax year from self-employment and property combined.

• from 6 April 2026, if the qualifying income is over £50,000
• from 6 April 2027, if their qualifying income is over £30,000
• from 6 April 2028, if their qualifying income is over £20,000

How does MTD work for landlords?

MTD means changing the way financial records are kept.

To keep MTD records, landlords must start listing business income and expenses on compatible software.

Then, every quarter, a summary of income and spending is filed online with HMRC. The deadlines for filing are the same for every landlord:

• August 7
• November 7
• February 7
• May 7

At the end of the tax year - April 5 every year - landlords must file a final declaration of income and expenses, which replaces the self-assessment return.

The declaration is filed by midnight on January 31 following the end of the relevant tax year.

For example, the final declaration for the tax year ending April 5, 2025, is January 31, 2026. Any income tax due must be paid by this date, too.

Filing the declaration allows landlords to confirm that the figures posted earlier in the tax year are correct. Taxpayers also have a chance to add information about any relevant personal income or tax reliefs received during the tax year, and to make adjustments.

Choosing the right MTD software

MTD software must handle three tasks:

• Creating and storing a database of property income and expenses
• A link with HMRC to file quarterly updates
• A link with HMRC to file a tax return each year

So, MTD software is a database that maintains financial transactions coupled with an online reporting package.

Some MTD software is a 'bridge' that allows landlords to keep records on a spreadsheet while linking to HMRC via an online portal.

Linking to the HMRC MTD portal

HMRC maintains a list of more than 20 MTD software providers that is free to access, with details about their packages.

Once downloaded, sign up as an individual for MTD for income tax, then get in touch with HMRC to authorise the link to the MTD portal, so landlords need a Government Gateway user ID and login. The software reconnects every 18 months.