Making Tax Digital for landlords: the complete 2026 guide

Making Tax Digital for Income Tax is the biggest change to how landlords report their tax in a generation, and it is already here. Since 6 April 2026, landlords whose income is over the threshold must keep digital records and send HMRC a quarterly update through recognised software, instead of a single annual Self Assessment return. This guide explains who is affected, what you actually have to do, the deadlines, and the software you can use to stay compliant.

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax, sometimes shortened to MTD for IT or MTD for ITSA, is a government programme that moves tax reporting away from the once-a-year Self Assessment return and into a digital, quarterly system. In practice, landlords in scope have to do three things: keep their income and expense records digitally, send HMRC a summary update every three months, and confirm the year with a final declaration. It changes how you report, not how much tax you pay.

Who is affected, and when

The rules are being introduced in stages, based on your income.

• From 6 April 2026: landlords whose combined gross income from property and self-employment is over £50,000.
• From April 2027: the threshold falls to £30,000.
• From April 2028: it falls again to £20,000.

Two points catch people out. First, qualifying income is gross rent before expenses, not profit, so you can be in scope even if your actual profit is modest. Second, it is your combined property and self-employment income that counts, so a smaller landlord who also does some self-employed work may cross the line sooner than expected.

Property held through a limited company is outside these rules, because companies pay Corporation Tax rather than Income Tax. If you hold property both personally and through a company, only the personal income counts toward the threshold, though you will still want clean records for both.

What you actually have to do

If you are in scope, there are three obligations.

Keep digital records. Your income and expenses have to be recorded digitally, in software that is recognised by HMRC, rather than on paper or in a standalone spreadsheet. Finance costs such as mortgage interest must be recorded separately from other expenses, because they are treated differently for tax.

Send quarterly updates. Four times a year, you send HMRC a summary of your income and expenses for the quarter. These are a straightforward check-and-send from your digital records, not a full tax calculation, and they are reporting updates rather than tax payments.

Submit a final declaration. After the tax year ends, a final declaration confirms your figures and any adjustments, replacing the finalisation part of the old annual return.

You also need to keep your digital records for around five years, and your tax payment dates do not change, they stay aligned with the existing Self Assessment timetable.

The deadlines in practice

The standard quarters run 6 April to 5 July, 6 July to 5 October, 6 October to 5 January, and 6 January to 5 April, with each update due one month after the quarter ends. There is also an option to use calendar quarters ending 30 June, 30 September, 31 December, and 31 March, which many landlords find simpler. The final declaration is due by 31 January following the end of the tax year, the same date as the current Self Assessment deadline.

Penalties

HMRC operates a points-based penalty system. You collect a point for each missed deadline, and once you reach the threshold a £200 penalty applies. To ease the transition, penalty points are not applied for late quarterly updates during the first 12 months from April 2026, though other obligations, such as the year-end requirements, are not covered by that grace period.

What this means for spreadsheets

For landlords in scope, a spreadsheet on its own is no longer enough, because it cannot submit to HMRC. You can keep using spreadsheets if you connect them to HMRC through recognised bridging software, which some smaller landlords prefer. But most landlords use the moment to move to proper landlord software, because it removes the manual work rather than just bolting a submission onto it.

The software you can use

Making Tax Digital requires software recognised by HMRC. HMRC keeps the authoritative list of recognised software on GOV.UK, and that is the definitive place to check, because recognition status, and the functions each tool supports, such as whether it files the final declaration as well as the quarterly updates, can change. The tools below are widely used by landlords. Confirm each is on HMRC’s list for the functions you need before you commit.

They fall into a few groups.

Landlord-specific accounting tools focus on rental income, expenses, and tax, usually with a live bank feed that reconciles rent automatically. Hammock is a well-known example, and was the first landlord-specific platform recognised by HMRC for Making Tax Digital. These tools handle the tax side cleanly and are a strong fit if accounting is your main need.

All-in-one landlord platforms combine accounting with the wider job of running a portfolio: tenancies, compliance, documents, and maintenance alongside the tax records. Landlord Vision, Alphaletz, and August sit here, along with newer platforms such as Latch and Propell. These suit landlords who want one system for the whole operation rather than tax alone.

Landlord management tools such as Landlord Studio lean toward property management and mobile use, with tax reporting included or available as an add-on. They suit landlords who want strong day-to-day management with MTD covered.

General accounting software such as Xero, QuickBooks, and FreeAgent is recognised by HMRC and works well if you already use it, or if you have mixed income beyond property, though it is not built specifically for landlords and needs setting up for per-property tracking.

Bridging software connects an existing spreadsheet to HMRC for landlords who want to keep their current records rather than move to a full platform.

How to choose the right software for you

The right choice depends on how you run your properties, not on which tool tops a list.

Portfolio size. A single let has very different needs from a large portfolio. Smaller landlords are often well served by a free tier or a low-cost tool, while larger portfolios justify a fuller platform.

Self-managing or using an agent. If a letting agent handles the day-to-day, you may only need something for the accounting and the MTD submission. If you self-manage, the wider tenancy and compliance features earn their place.

How you hold the property. MTD for Income Tax applies to property held personally, not through a limited company, but you still want clean records either way. If you hold a mix, look for a tool that handles both.

Accounting only, or the whole operation. Decide whether you want software just for tax, or a platform that runs tenancies and compliance too, then choose the category that fits.

Accountant access. If an accountant handles your submissions, check they can access the software and are happy to work with it.

Most tools offer a free trial or a free tier, so the best final step is to run a real quarter of your own data through your shortlist before you commit.

How to get ready

• Check if you are in scope. Add up your gross property and self-employment income for the relevant tax year and see whether you are over the current threshold.
• Go digital now. Stop relying on paper and standalone spreadsheets, and start recording income and expenses digitally.
• Choose recognised software. Pick a tool from HMRC’s recognised list that fits how you operate, and start using it early, even voluntarily, so the first real deadline is not the first time you use it.
• Involve your accountant. If you use one, agree who is doing what, and make sure they can access your records.

Frequently asked questions

Do I need software for Making Tax Digital?
If you are in scope, yes. You must keep digital records and submit quarterly updates through HMRC-recognised software, so a compatible tool, or recognised bridging software connected to a spreadsheet, is required.

Is a spreadsheet still enough?
Not on its own. A spreadsheet cannot submit to HMRC under Making Tax Digital. You can keep using one if you connect it through recognised bridging software, but many landlords move to proper landlord software instead.

Does Making Tax Digital apply to property held in a limited company?
No. MTD for Income Tax applies to property held personally. Company-held property is subject to Corporation Tax and is outside these rules, though only your personal income counts toward the threshold if you hold both.

What if my income is below the threshold?
You are not required to join yet, though the threshold falls to £30,000 in April 2027 and £20,000 in April 2028, so many landlords will come into scope over time. You can also join voluntarily.

When are the deadlines?
Quarterly updates are due one month after each quarter ends, and the final declaration is due by 31 January following the tax year. Tax payment dates are unchanged.

Does Making Tax Digital change how much tax I pay?
No. It changes how you record and report your income, not how your tax is calculated or how much you owe.

The takeaway

Making Tax Digital for Income Tax is live, and for landlords in scope it makes getting organised a requirement rather than a choice. The practical response is to work out whether you are affected, move your records into HMRC-recognised software that fits how you run your properties, and start early so the first deadline is routine rather than a scramble.