Making Tax Digital for Landlords 2026: Ultimate Guide to Avoid Costly Penalties
Making Tax Digital for landlords started on 6 April 2026. If your gross rental income plus any self-employed turnover was more than £50,000 on your 2024/25 tax return, you must now keep digital records, send HMRC four quarterly updates a year through compatible software and file a final declaration by 31 January. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028, so many more Bolton landlords will join over the next two years.
This guide explains who is in scope, how qualifying income is worked out (including for jointly owned property), the 2026/27 deadlines, the penalty rules and the steps to take now. If you would rather hand it over, our accountants for landlords can set up your software and file every update for a fixed fee agreed upfront.
Table of Contents
What Making Tax Digital for landlords means
Making Tax Digital (MTD) for Income Tax replaces the single annual Self Assessment return with a digital process. Instead of gathering a year’s paperwork in January, you record rent and expenses digitally as you go and send a summary to HMRC every three months. You can read a short definition in our Making Tax Digital glossary entry.
Making Tax Digital for landlords does not change how much tax you pay. Allowable expenses, the Section 24 mortgage interest restriction and the rent-a-room limit all work as before. What changes is how often you report and the tools you use.
- Keep digital records of each item of property income and expense
- Send a quarterly update to HMRC every three months using MTD-compatible software
- Submit a final declaration (the new tax return) by 31 January after the tax year ends
- Pay your tax on the same dates as now: 31 January and 31 July
Who must use MTD from April 2026, 2027 and 2028
You are brought into Making Tax Digital for landlords based on your qualifying income on an earlier tax return. HMRC checks each year’s Self Assessment return and writes to people who are over the threshold.
| Start date | Qualifying income over | Tax return HMRC looks at |
|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 |
| 6 April 2027 | £30,000 | 2025/26 |
| 6 April 2028 | £20,000 | 2026/27 |
Once you are in, you stay in unless your qualifying income falls below the threshold for three consecutive years. You can also sign up voluntarily before your start date, which is a sensible way to test your software while there is no pressure.
How qualifying income is worked out
For Making Tax Digital for landlords, qualifying income is your gross income from property and self-employment added together, before any expenses. It includes UK and overseas rental income. It does not include employment income, pensions, dividends, savings interest or capital gains.
Because expenses are ignored, a landlord with £35,000 of rent and £25,000 of costs is still over £30,000 for MTD purposes, even though the taxable profit is only £10,000.
Jointly owned property
For jointly owned property, each owner counts only their own share of the gross rent. A couple who own a house 50:50 that lets for £24,000 a year each have £12,000 of qualifying income from it. Each owner who is in scope sends their own quarterly updates; there is no joint MTD submission.
HMRC also allows joint owners to send income only in their quarterly updates for jointly let property and report the expenses later, by resending the fourth update before the final declaration. Any properties you own alone must include both income and expenses.
Who is not affected
- Landlords who own property through a limited company: the company pays Corporation Tax and is outside MTD for Income Tax. Our guide to buying property through a limited company explains the trade-offs.
- Partnerships, which do not yet have a start date
- People whose qualifying income is at or below the threshold
- People who are exempt, for example because they are digitally excluded due to age, disability or location
Quarterly update deadlines for 2026/27
Under Making Tax Digital for landlords, each quarterly update is cumulative: it covers the tax year to date, not just the latest three months. The standard periods and deadlines are:
| Update period | Deadline |
|---|---|
| 6 April to 5 July 2026 | 7 August 2026 |
| 6 April to 5 October 2026 | 7 November 2026 |
| 6 April 2026 to 5 January 2027 | 7 February 2027 |
| 6 April 2026 to 5 April 2027 | 7 May 2027 |
| Final declaration for 2026/27 | 31 January 2028 |
If your accounts run to 31 March, you can choose calendar update periods (ending 30 June, 30 September, 31 December and 31 March) instead. The deadlines stay the same. You must pick the option in your software before sending the first update of the year. For a walk-through of the submission itself, see how to file your MTD quarterly update.
Worked example: will you be in from April 2027?
These are illustrative examples only, using the £30,000 threshold that applies from 6 April 2027 and income from the 2025/26 tax return.
| Landlord | Gross income in 2025/26 | Qualifying income | In MTD from April 2027? |
|---|---|---|---|
| Sole owner of three terraced houses, each let at £935 a month | Rent £33,660 | £33,660 | Yes |
| Joint owners (50:50) of a portfolio with £56,000 total rent, no other business income | Rent share £28,000 each | £28,000 each | No, but likely from April 2028 |
| Landlord with one flat at £800 a month who also runs a cleaning business | Rent £9,600 + turnover £24,000 | £33,600 | Yes |
| Employee earning £60,000 who lets one house at £1,100 a month | Rent £13,200 (salary ignored) | £13,200 | No |
The first landlord must keep digital records from 6 April 2027 and send the first quarterly update by 7 August 2027. The final declaration for 2027/28 is due by 31 January 2029. Remember that the 2025/26 return that decides this is due by 31 January 2027; our tips on filing early as a landlord can help you get it done in good time.
Penalties under MTD
Making Tax Digital for landlords uses a points-based system for late submissions. You get one point for each missed deadline, and a £200 penalty when you reach 4 points, with a further £200 for each later missed deadline.
- 2026/27: HMRC has confirmed there are no penalties for missing a quarterly update deadline in the 2026/27 tax year. Missing the final declaration deadline still earns a point.
- 2027/28: the government has said people joining from April 2027 will not receive penalty points for late quarterly updates in their first year.
- Late payment: penalties apply if tax is not paid in full, starting at 3% of the tax owed for 2026/27 if it is still unpaid after 15 days, plus interest. In your first year there is a one-off 30-day grace period.
Quarterly updates must still be sent before you can submit your final declaration, so the soft landing is a learning period, not a reason to skip them.
How to get ready for Making Tax Digital for landlords
- Check your qualifying income on your last two tax returns, counting only your share of any joint property.
- Choose software that supports UK property income, not just self-employment. Spreadsheets can still be used with bridging software.
- Separate your finances. A dedicated bank account for rent and property costs makes digital record keeping much simpler.
- Keep records digitally as you go, and store receipts for as long as required; see how long to keep business records.
- Sign up through GOV.UK before your first quarterly update is due, or authorise your accountant to do it for you.
- Review your wider position, including the Renters’ Rights Act changes and your overall landlord tax planning.
Many landlords find it easiest to combine Making Tax Digital for landlords with ongoing bookkeeping support, so records are kept up to date each month and each update is checked before it is sent.
Frequently asked questions
Do I need Making Tax Digital if my rental profit is under £30,000?
Possibly. MTD is based on gross income before expenses, not profit. If your gross rent plus any self-employed turnover was more than £30,000 on your 2025/26 tax return, you must use MTD from 6 April 2027.
How does MTD work for jointly owned rental property?
Each owner counts only their share of the gross rent towards the threshold and, if in scope, sends their own quarterly updates. Joint owners can report income only in quarterly updates and add the expenses before the final declaration.
Can I still use a spreadsheet for MTD?
Yes, as long as you use bridging software that links the spreadsheet to HMRC and sends the updates digitally. You cannot type figures into HMRC’s website by hand.
Is there a penalty if I miss a quarterly update in 2026/27?
No. HMRC has confirmed there are no penalties for missing quarterly update deadlines in 2026/27, but you must still send all four updates before you can submit your final declaration, and late payment penalties still apply.
Do landlords with a limited company need to use MTD for Income Tax?
No. Property held in a limited company is taxed through Corporation Tax, so it is outside MTD for Income Tax. Rent you receive personally is still counted.
Get help with Making Tax Digital in Bolton
Cangaf’s ACCA-qualified team in Bolton handles Making Tax Digital for landlords across Greater Manchester: we choose software, set up digital records and send every quarterly update and final declaration on time. Call 01204 859315, email [email protected] or request a fixed-fee quote; the fee is agreed upfront, so there are no surprises.
Official guidance: check if you need to use MTD for Income Tax, send quarterly updates, penalties for MTD for Income Tax and find compatible software (GOV.UK).
