Making Tax Digital (MTD) is set to change the way many landlords report rental income to HM Revenue & Customs (HMRC).
If you currently file a Self Assessment tax return each year, you may soon need to follow a new digital reporting process instead. While the transition will be introduced gradually, the first major phase begins in April 2026.
For landlords, the key is preparation. Taking time now to understand what is changing can make the move far simpler when the new rules come into force.
This guide explains what Making Tax Digital means, who it will apply to first, and how landlords can start getting ready.
Why is Making Tax Digital being introduced?
Making Tax Digital is part of HMRC’s wider plan to modernise the UK tax system.
The current Self Assessment process relies heavily on end-of-year reporting, often based on manual record keeping. MTD is designed to improve this by encouraging more accurate digital records and more regular reporting throughout the year.
For landlords, the amount of tax owed will not change, but the way income information is provided to HMRC will look quite different.
What will landlords be expected to do?
Under Making Tax Digital for Income Tax, landlords within scope will gradually move away from submitting a single annual return.
Instead, the new system introduces an ongoing reporting process, which involves:
- maintaining rental income and expense records in a digital format
- sending quarterly updates to HMRC using compatible software
- submitting a final declaration after the tax year ends (similar to confirming your annual return)
This approach is intended to provide a clearer picture of income across the year, rather than relying on figures being submitted only at the end.
When do the new rules start?
Making Tax Digital for Income Tax will be introduced in stages, beginning with landlords who earn the highest qualifying income.
From 6 April 2026, landlords must comply if their qualifying income from property and/or self-employment exceeds £50,000 per year.
The threshold will decrease in later years:
- April 2027 — income over £30,000
- April 2028 — income over £20,000 (subject to legislation)
As a result, many more landlords will be brought into the system over time.
Will Making Tax Digital apply to you?
Making Tax Digital will apply if:
- You are an individual registered for Self Assessment
- You earn income from rental property, self-employment, or both
- Your gross qualifying income exceeds the threshold
Qualifying income is based on total income before expenses are deducted, not on profit.
Landlords who operate through limited companies are not included under these Income Tax rules, as companies pay Corporation Tax instead.
What does digital reporting actually involve?
For many landlords, the biggest adjustment will be moving toward year-round digital record-keeping.
Digital records of income and expenses
Landlords will need to keep digital records of:
- rent received
- repairs and maintenance costs
- letting agent fees
- other allowable property expenses
Once MTD is in effect, paper-only systems will no longer be sufficient.
Quarterly updates rather than one annual return
Rather than reporting rental income once a year, landlords will send summary updates every quarter (every three months) through digital reporting software.
These updates are not tax bills. They simply provide HMRC with a running record of income and expenses across the tax year.
End-of-year declaration remains in place
After the tax year ends, landlords will still submit a final declaration confirming their overall figures.
Making Tax Digital changes how income is reported, but the usual Self Assessment payment deadlines will still apply.
Software and professional support for MTD
HMRC will not provide its own software platform for Making Tax Digital.
Landlords will need to use commercial software that allows rental records to be stored digitally and updates to be submitted correctly.
Some landlords may choose to manage this themselves, while others may prefer an accountant or tax adviser to handle the process on their behalf.
HMRC also provides guidance on how to choose suitable software depending on your needs.
Steps landlords can take before April 2026
Even though the first phase begins in April 2026, early planning can make the transition much smoother.
Landlords may want to:
- Check whether their income exceeds the £50,000 threshold
- Speak with a tax adviser about how MTD will apply
- Consider moving away from paper-based systems now
- Keep rental documentation organised and up to date
The sooner digital record-keeping becomes routine, the easier the shift to MTD reporting is likely to feel.
Supporting landlords through the transition
Making Tax Digital represents a major change in how rental income is reported, with quarterly updates and digital systems becoming mandatory from April 2026 for those above the initial threshold.
With the right preparation, landlords can adapt smoothly and remain compliant as the new rules are introduced.
CJ Hole can support landlords with professional property management, clear rental statements, and local guidance to help you stay organised as tax reporting obligations evolve. If you would like advice ahead of April 2026, speak to your local CJ Hole branch.
