The shift to Making Tax Digital (MTD) for Income Tax for landlords is no longer a distant change.
Those who delay preparing could soon find themselves dealing with unnecessary cost, disruption and compliance risk.
From 6 April 2026, landlords with qualifying income above £50,000 will be brought into MTD for Income Tax. The threshold then lowers to £30,000 in April 2027 and £20,000 from April 2028. It is important to note the income represents the rental income from properties not the profits subject to tax.
With the first phase now close, it is crucial landlords begin preparing their systems and processes sooner rather than later.
MTD for Income Tax changes the way property income is reported to HMRC. The traditional once-a-year Self Assessment return will be replaced with a more regular, digital approach that includes:
Landlords with UK or overseas rental income will be required to report income and expenses every quarter, whether they own a single buy-to-let or manage a larger portfolio.
For landlords with multiple properties, this represents a noticeable increase in ongoing administration.
Accurate digital records that meet HMRC requirements will be essential and many landlords will need to move to suitable online accounting software.
While HMRC will allow bridging tools that link spreadsheets to its systems, these can be complicated to maintain and often miss the wider benefits of full cloud accounting platforms.
A significant number of landlords still rely on paper records, spreadsheets, or annual catch-ups with their figures. Under MTD for Income Tax, this approach will no longer work.
Quarterly reporting requires your numbers to be kept up to date throughout the year rather than reviewed only at the filing deadline.
Leaving preparation too late increases the risk of mistakes, rushed submissions, or missed obligations once MTD becomes mandatory.
Although HMRC has confirmed that penalties will not be charged in the first year of MTD for Income Tax, this is only a temporary soft landing.
After this period, fines will increase under a new points-based penalty system for non-compliance.
Preparing early allows landlords time to:
The starting point should be a review of your most recent tax return to establish your qualifying income and expected MTD start date.
From there, landlords will need to move to MTD-compliant software, as digital submissions will be compulsory.
Many platforms are designed specifically for landlords and property investors, helping to track rental income, categorise expenses and manage quarterly reporting more efficiently.
Making the transition early provides time to test systems, resolve issues and build confidence before quarterly updates become compulsory.
While MTD for Income Tax increases reporting frequency, it also encourages more regular visibility over your property finances.
For many landlords, this leads to improved cashflow awareness and fewer surprises at year end.
Professional support can also ease the administrative load. Quarterly updates can be prepared and submitted on your behalf, providing reassurance that your obligations are being met accurately and on time.
MTD for Income Tax represents one of the biggest changes to landlord tax reporting in recent years.
Understanding when you fall within scope and preparing your systems early can help avoid disruption once quarterly reporting becomes mandatory.
Our tax and property specialists support landlords with MTD readiness. If you would like tailored advice on how MTD for Income Tax will affect you, get in touch with Property Partner, Andy Noton (andrewnoton@lubbockfine.co.uk)
