Making Tax Digital: What Landlords Earning Over £50k Need to Do Now

Three weeks. That is how long landlords with gross rental income above £50,000 have left to get ready for Making Tax Digital.

From 6 April 2026, a significant number of UK landlords will be legally required to keep digital records and submit quarterly income and expense summaries to HMRC using approved software. The annual Self Assessment return does not disappear entirely, but it gets replaced by a new process that requires action four times a year instead of once.

If you have not yet looked into this, now is the moment. Not because HMRC will come down hard on you from day one (there is a soft landing in year one for quarterly submissions), but because signing up takes time, choosing software takes time, and getting your records into a digital format takes time. Starting on 6 April is already starting late.

Below is the detail on both counts.

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Who Is Affected from April 2026

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) goes live for landlords whose qualifying income exceeded £50,000 in the 2024 to 2025 tax year. The threshold is based on the tax year ending 5 April 2025.

Qualifying income includes:

• Gross rental income from UK and overseas properties (before any expenses are deducted)
• Any self-employment turnover

It does not include employment income (PAYE), dividends, savings interest, or pension income.

That £50,000 is gross turnover, not profit. If your rental income totals £55,000 before expenses and you have a net profit of £12,000 after mortgage interest, management fees, and repairs, you are still above the threshold and must comply.

This matters because many landlords with modest profits are actually above the threshold. A landlord with four properties renting at around £1,100 a month each is earning roughly £52,800 gross per year. Whether they are making money after costs is a separate question.

HMRC identifies affected landlords from their 2024 to 2025 Self Assessment return, which was due by 31 January 2026. If you filed your return and your qualifying income was above £50,000, expect a letter from HMRC confirming your obligation. You can also use the eligibility checker on GOV.UK to confirm your position.

Limited company landlords are not affected. MTD for Income Tax applies to sole traders and individual landlords only. If all your rental properties are owned through a limited company, this does not apply to you right now.

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What Actually Changes

The core change is moving from one annual tax return to a quarterly reporting system plus a final declaration.

Under the new process, landlords submit a summary of income and expenses to HMRC every three months using MTD-compatible software. These quarterly updates are not tax payments. They are progress reports that keep HMRC informed throughout the year rather than at the end of it.

The quarterly deadlines for the 2026 to 2027 tax year are:

• 7 August 2026 (covering 6 April to 5 July)
• 7 November 2026 (covering 6 July to 5 October)
• 7 February 2027 (covering 6 October to 5 January)
• 7 May 2027 (covering 6 January to 5 April)

After the four quarterly updates, you submit an End of Period Statement to finalise your property income figures, then a Final Declaration by 31 January 2028. The Final Declaration brings in all other income sources, personal allowances, and reliefs. It effectively replaces your current Self Assessment return.

Tax payments on account and balancing payments continue on the same dates they do now: 31 January and 31 July.

So the rhythm is more frequent reporting throughout the year, with your tax liability still calculated and paid on familiar deadlines.

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The Soft Landing: What It Means and What It Does Not Cover

HMRC has confirmed a soft landing for the first year of MTD ITSA. As confirmed on GOV.UK, there are no penalty points for missing any of the four quarterly update deadlines during the 2026 to 2027 tax year.

This is meaningful. You will not accumulate penalty points for late quarterly submissions in year one, even if you are mandated from April 2026.

However, the soft landing does not cover everything.

The Final Declaration deadline of 31 January 2028 carries full penalties from day one. Late payment penalties also apply from the start. Unlike the points-based late submission system, late payment penalties are not points-based — they are charged as a percentage of the unpaid amount. In your first year of MTD (the 2026 to 2027 tax year), HMRC gives you a 30-day grace period from the payment due date before any penalty is charged. From the second year onwards, this grace period reduces to 15 days. Once the grace period has passed, a 3% penalty applies to the amount owed at day 15, a further 3% applies at day 30, and an annual rate of 10% per year is charged daily from day 31 until the tax is paid.

And there is a practical point: you must send your quarterly updates before you can submit your End of Period Statement and Final Declaration. So even though there are no penalty points for late quarterly submissions in year one, you cannot simply skip them and file everything in January 2028. The updates still need to happen in sequence.

From the 2027 to 2028 tax year onwards, the points-based penalty system applies in full to quarterly submissions. Four missed deadlines means four penalty points, which triggers a £200 penalty. Every additional late submission after that adds another £200.

The soft landing is a breathing space. Use it to get set up properly, not as a reason to delay.

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What You Need to Do Before 6 April 2026

There are three practical steps to get ready.

Step one: Check your qualifying income position.

Use RealYield's cashflow tool to add up your gross rental income across all properties. If you are near the £50,000 threshold, you need to know where you stand. It is the gross figure that counts, not what hits your bank account after expenses.

If you have any self-employment income alongside rental income, add that in too. The threshold applies to the combined total.

Step two: Choose your software.

You cannot comply with MTD using a paper ledger or a standard spreadsheet alone. You need HMRC-recognised software.

There are two broad categories. Full accounting software such as Xero, QuickBooks, FreeAgent, and Sage handles your bookkeeping and submits directly to HMRC. Several landlord-specific platforms such as Hammock and RentalBux are designed specifically for property income, including bank feed connections, expense categorisation, and direct MTD submission.

If you already keep tidy spreadsheets and do not want to change, bridging software (such as VitalTax or 123 Sheets) can read your spreadsheet data and submit it to HMRC in the required format.

The official software finder on GOV.UK lists all HMRC-recognised options. Use this as your starting point rather than taking a recommendation from anyone with a commercial interest in a particular platform.

Step three: Sign up and authorise your software before 6 April.

Once you have chosen software, you need to sign up for MTD ITSA through HMRC and authorise your chosen software to connect to your account. If you use an accountant, they can do this on your behalf, but they will need your instruction.

Do not assume your accountant has already done this. Many landlords have received letters from HMRC and filed them away without acting. If in doubt, check with your accountant this week.

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The Phased Roll-Out: Who Comes Next

If your qualifying income was between £30,000 and £50,000 in the 2025 to 2026 tax year, you will be brought into MTD from 6 April 2027. This is now confirmed in legislation.

A further threshold reduction to £20,000 is planned for 6 April 2028, based on the 2026 to 2027 tax year figures.

This means that almost all landlords who report through Self Assessment will eventually be brought within MTD. Getting set up now, even if you are not yet mandated, means you are ahead of the curve when your threshold arrives.

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A Note on Record-Keeping

MTD requires digital records of all rental income and expenses. That means a digital record of every rent payment received, every repair bill, every management fee, every insurance premium, every allowable expense.

This does not have to be complicated. Good accounting software pulls in transactions from your bank feed automatically, and you categorise as you go. The quarterly submission is then generated from those records.

The shift in mindset is moving from once-a-year to throughout-the-year. Instead of emailing your accountant a folder of receipts in January, you are keeping things current as they happen. Many landlords who have made the switch find it significantly reduces the stress of the January deadline.

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What This Does Not Change

MTD changes how you report, not how much you owe. The tax calculations remain the same. Section 24 still applies. Your allowable expenses are still the same. Your tax rates and allowances are unchanged.

And if you own through a limited company, none of this applies to you at all under the current rules.

The change is purely in process: digital records, quarterly submissions, a different path to the same annual reckoning.

This article is for informational purposes only and does not constitute financial or investment advice. Tax rules and legislation change frequently — always verify current rates with HMRC or GOV.UK and seek independent professional advice before making investment decisions.