Do landlords have to use Making Tax Digital from 2026?

Full answer

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) changes how landlords and self-employed people report income. Instead of one annual Self Assessment return, those in scope must keep digital records and submit quarterly updates to HMRC through MTD-compatible software, then finalise the year with a final declaration. The rollout is staged by income level. From 6 April 2026, the first tranche of sole traders and landlords - those whose combined qualifying gross income (from self-employment and property) exceeds the highest entry threshold - must comply. Lower income thresholds are then brought in over the following tax years, widening the net. Your qualifying income is gross turnover and rents before expenses, not profit, so a landlord with high rents but modest profit can still be caught. Who it affects: individual landlords (including jointly owned property, reported on each owner's share) and sole traders. Partnerships and companies are not in this particular regime. If you have both a trade and rental income, you add them together to test the threshold. What you must do: use software that connects to HMRC (a spreadsheet alone is not enough unless bridged by compatible software), record income and expenses digitally as you go, and file four quarterly updates plus a year-end finalisation. The quarterly updates are running totals and do not need to be perfect each time, but the final declaration must be accurate. Remember the property allowance of GBP 1,000: if your property income is below this you generally have nothing to report, and small landlords below the relevant MTD threshold continue with normal Self Assessment for now. Some exemptions apply (for example, on grounds of digital exclusion). Because the exact entry thresholds and timing have been confirmed by HMRC, check gov.uk for the precise figures for your year. To estimate the tax due on your rental profit, use a self-employed or income tax calculator.

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