MTD for landlords: thresholds, dates and tax software
Learn how MTD for landlords can simplify tax reporting and help you stay compliant with digital rules.
Written by Lena Hanna—Trusted CPA Guidance on Accounting and Tax. Read Lena's full bio
Published Wednesday 22 April 2026
Table of contents
Key takeaways
- Prepare for MTD by checking whether your total qualifying income (rental plus any sole trader earnings) exceeds the threshold for your start year: £50,000 from April 2026, £30,000 from April 2027, or £20,000 from April 2028.
- Switch to HMRC-recognised, cloud-based accounting software that can track property income, categorise expenses, and submit quarterly updates directly to HMRC, as spreadsheets alone do not meet MTD requirements.
- Understand that MTD replaces the single annual Self Assessment return with digital record-keeping, four quarterly income and expense submissions, and a final year-end declaration to confirm your total tax owed.
- Sign up for MTD at least a month before your first quarterly deadline, and contact HMRC in advance if you believe you qualify for an exemption based on income level, digital exclusion, or insolvency.
Key takeaways
- Making Tax Digital for Income Tax requires landlords to keep digital records, submit quarterly updates to HMRC, and file an annual final declaration using compatible software.
- The rollout happens in three phases: April 2026 for qualifying income over £50,000, April 2027 for qualifying income over £30,000, and April 2028 for qualifying income over £20,000.
- You may be exempt from MTD if your total qualifying income falls below the threshold for your start year, though certain trusts, estates, and non-resident landlord companies may also be exempt.
- Choose cloud-based accounting software that connects to your bank account and is officially recognised by HMRC for MTD for Income Tax compliance.
What is Making Tax Digital for landlords?
Making Tax Digital (MTD) for landlords is HMRC's requirement for property owners to keep digital records and report rental income quarterly instead of filing a single annual Self Assessment return.
MTD was introduced to modernise the UK tax system and address the £5 billion tax gap linked to Self Assessment errors, which accounts for around 18.5% of the total. For landlords, this means using compatible software to track income and expenses throughout the year.
MTD gives you a clearer view of your tax position throughout the year. Here's what you'll need to do:
- keep digital records: track rental income and expenses using MTD-compatible software
- send quarterly updates: submit income and expense summaries to HMRC four times a year
- file a final declaration: confirm your tax position at the end of each tax year
Who needs to comply with Making Tax Digital?
Landlords must comply with MTD for Income Tax if their qualifying income exceeds the threshold for their start year. Qualifying income includes rental income plus any sole trader earnings combined.
The rollout affects landlords in three phases:
- April 2026: Qualifying income over £50,000
- April 2027: Qualifying income over £30,000
- April 2028: Qualifying income over £20,000
Understanding how HMRC calculates your qualifying income helps you determine when you need to comply.
How qualifying income is calculated
Your qualifying income includes gross rental income plus any sole trader earnings. Both sources count toward the threshold.
For example, if you earn £35,000 from rental properties and £20,000 from self-employment, your qualifying income is £55,000. If you're VAT-registered, you'll need separate MTD registrations for VAT and Income Tax. The £30,000 threshold starts in April 2027, with £20,000 following in April 2028.
Who is exempt from Making Tax Digital?
You're exempt from MTD for Income Tax if your qualifying income falls below the threshold for your start year. Some landlords also qualify for exemptions based on personal circumstances.
You may be exempt if:
- your income is below the threshold: under £50,000 until April 2027, or under £30,000 until April 2028
- you have a digital exclusion: age, disability, location, or religious beliefs prevent you from using digital tools
- you're subject to an insolvency procedure
If you think you qualify for an exemption, contact HMRC to discuss your situation before the deadline.
When do the new MTD requirements start?
The MTD rollout follows a phased timeline based on your qualifying income:
- April 2026: Landlords with qualifying income over £50,000
- April 2027: Landlords with qualifying income over £30,000
- April 2028: Landlords with qualifying income over £20,000
Your first quarterly update will be due one month after your first reporting period begins. For the April 2026 cohort, the initial submission is due on 7 August 2026.
What you need to do to comply with MTD
To meet the new tax rules, landlords must follow a clear set of digital reporting steps. These requirements replace the traditional annual Self Assessment tax return process.
Keep digital records
You must keep digital records of all your property income and expenses. This means using compatible software to track your finances rather than relying on paper receipts and manual spreadsheets.
Submit quarterly updates to HMRC
Instead of one annual return, you'll send summary updates of your income and expenses to HMRC every three months, though the April 2026 cohort won't receive penalty points for late submissions on their first four updates. These updates are generated and submitted directly through your accounting software.
Each quarter, you'll need to submit a summary of your rental income and expenses to HMRC. Here's what to expect:
- submit within one month: send your updates one month after each quarter ends
- report each income source separately: submit property income and any sole trader income as individual submissions
- follow joint ownership rules: special easements apply if you share property ownership with others
File your final declaration
At the end of the tax year, you'll submit a final declaration. This process finalises your property income, applies any accounting adjustments or reliefs, and confirms the total tax you owe.
How to choose MTD-compatible software
To comply with MTD, you'll need software that connects directly to HMRC and allows you to keep digital records and submit quarterly updates. You can't use spreadsheets alone.
When choosing software for your rental properties, look for these features:
- track property income: categorise rent received by property
- manage expenses: record and categorise allowable expenses
- submit quarterly: submit updates directly to HMRC from the software
- integrate bank feeds: automatically import transactions from your bank account
HMRC maintains a list of compatible software on GOV.UK. Costs vary from free basic options to paid plans with more features. The government estimates an average annual additional cost of £110 for mandated businesses.
Xero is MTD-compatible and designed for landlords managing property income. It handles digital record-keeping and quarterly submissions automatically.
How to sign up for Making Tax Digital for Income Tax
Signing up for MTD registers you with HMRC's digital system and connects your software to submit quarterly updates.
Follow these steps to sign up:
- Check your qualifying income to confirm you meet the threshold for your start year.
- Choose MTD-compatible software and set it up with your property and income details.
- Sign up through HMRC using your Government Gateway account or through your software.
- Receive your confirmation with your MTD reference number.
- Start keeping digital records before your first quarterly deadline.
You can sign up voluntarily before the mandatory start date to get familiar with the process. HMRC will review 2024–25 tax returns and formally notify those required to join the first phase. HMRC recommends signing up at least a month before your first quarterly period begins.
Getting help with MTD compliance
Preparing for MTD doesn't have to be complicated. Start by checking your qualifying income against the thresholds, then choose MTD-compatible software that suits your property portfolio.
Many landlords simplify MTD compliance by using cloud accounting software like Xero, which handles digital record-keeping and quarterly submissions automatically. See Xero's pricing plans and get one month free to see how it works for your rental properties.
If you'd prefer professional support, an accountant or bookkeeper can help with software setup, quarterly submissions, and tax planning. Find an MTD-specialist adviser through the Xero Advisor Directory.
FAQs on MTD for landlords
Here are answers to the most common questions landlords have about Making Tax Digital requirements.
Do landlords have to do MTD?
Yes, you must comply with MTD for Income Tax if your qualifying income exceeds the threshold for your start year. This includes your rental income plus any sole trader earnings combined. The rules start in April 2026 for income over £50,000, with lower thresholds following in 2027 and 2028.
What is the best MTD software for landlords?
The best MTD software depends on your portfolio size and how complex your situation is. Look for software that tracks property income, categorises expenses, and submits quarterly updates directly to HMRC. HMRC maintains an approved software list on GOV.UK. Xero is MTD-compatible and offers features specifically designed for landlords managing rental income.
Can landlords use existing MTD for VAT software for income tax requirements?
MTD for VAT and MTD for Income Tax are separate obligations. VAT software doesn't automatically cover Income Tax requirements.
If you're already compliant with MTD for VAT, you'll still need to sign up separately for MTD for Income Tax. Some software platforms, like Xero, can support both obligations from one account.
What happens if a landlord's income drops below the threshold after signing up?
Once you've signed up, you'll continue following MTD rules regardless of income changes. The requirements only stop applying after your income stays below the threshold for three consecutive tax years. This prevents constant status changes as turnover fluctuates.
How do MTD rules work for jointly owned properties?
Each joint owner must keep digital records and submit updates for their share of the income. Special easements exist to simplify reporting for jointly owned properties.
Key points for joint ownership:
- submit individually: each owner submits their own quarterly updates
Become a Xero partner
Join the Xero community of accountants and bookkeepers. Collaborate with your peers, support your clients and boost your practice.