Making Tax Digital for Landlords: Who Is In Scope and What You Have to Do

Making Tax Digital for Income Tax became mandatory on 6 April 2026 for every landlord and sole trader whose gross self-employment and property income for 2024-25 came to more than £50,000 — and the first quarterly update is due on 7 August 2026. The threshold is tested on rent before expenses, not profit, which catches far more landlords than many expect. This guide explains who is in scope now and in the next two waves, what "qualifying income" actually measures, the quarterly deadlines and the year-end return, the penalty position for 2026-27, and the exemptions. It is general information about the rules, not tax advice — for decisions about your own position, speak to an accountant or HMRC.

Key takeaways

• The test is gross income, not profit. Qualifying income is your combined turnover from property and self-employment before a single expense is deducted. A landlord with £52,000 of rent and £20,000 of costs is in scope, even though the profit is nowhere near £50,000.
• Three waves. More than £50,000 (tested on 2024-25) meant mandation from 6 April 2026; more than £30,000 (tested on 2025-26) brings mandation from 6 April 2027; more than £20,000 (tested on 2026-27) from 6 April 2028.
• Four fixed deadlines a year. Quarterly updates are due by 7 August, 7 November, 7 February and 7 May, whether you report tax-year quarters or elect calendar quarters. The first-ever deadline is 7 August 2026.
• 2026-27 is a soft-landing year for updates. HMRC has confirmed no penalties for missed quarterly update deadlines in 2026-27. The points-based penalties start with the 2027-28 tax year.
• Joint owners count their share only. A property earning £50,000 split equally between two owners adds £25,000 to each owner's qualifying income.

Who is in scope, and from when

Making Tax Digital (MTD) for Income Tax is the digital record-keeping and quarterly reporting regime created by the Income Tax (Digital Obligations) Regulations 2026 (SI 2026/336), made on 23 March 2026 and in force from 1 April 2026. It applies across the UK, and it replaces the way affected landlords interact with Self Assessment rather than changing how much tax is due.

Mandation arrives in three waves, each tested on the qualifying income shown by an earlier year's tax return:

• From 6 April 2026 — qualifying income of more than £50,000 in the 2024-25 tax year.
• From 6 April 2027 — qualifying income of more than £30,000 in the 2025-26 tax year.
• From 6 April 2028 — qualifying income of more than £20,000 in the 2026-27 tax year.

In each case the statutory test is "more than" the threshold: income of exactly £50,000 in 2024-25 did not bring a landlord into the first wave. Landlords at or below £20,000 are automatically exempt for now.

What counts as qualifying income

Qualifying income is the total of your gross income — turnover before expenses — from self-employment and from property, based on the tax return you submitted for the test year. Two features of the definition matter particularly to landlords:

It is a gross figure. Mortgage interest, repairs, agent fees, insurance and every other deduction are ignored. The comparison is rent received against the threshold, not profit. HMRC's own worked example combines £25,000 of rental income with £27,000 of self-employment turnover to reach £52,000 — over the first-wave threshold, even if the profit on both activities combined were modest.

Jointly owned property counts proportionately. Only your share of the income from a jointly owned property counts towards your qualifying income. Equal joint owners of a property producing £50,000 a year each record £25,000.

Income outside the calculation includes employment income taxed under PAYE, dividends (including dividends from your own limited company), your share of partnership profit as an individual partner, the State Pension and private pensions. A landlord with a £60,000 salary and £30,000 of rent is not in the first wave: only the £30,000 counts. Rent received by a limited company is also outside this regime — that income belongs to the company and is taxed under corporation tax, not under an individual's Self Assessment.

What you actually have to do

Being in scope creates four running obligations, all of them built around MTD-compatible software:

Keep digital records. Each item of rental income and each expense must be recorded digitally, showing the amount, the date, and the category (the same categories used for Self Assessment). A paper rent book or an end-of-year shoebox of receipts no longer satisfies the record-keeping duty on its own — the records themselves must live in functional compatible software.

Use recognised software. HMRC publishes a software finder tool listing products that have been through its recognition process; HMRC does not recommend any particular product. Some products handle record-keeping and submission; others are bridging tools that connect spreadsheets to HMRC's systems.

Send quarterly updates. Each quarter you (or your agent) submit a cumulative summary of income and expenses per activity. HMRC is explicit that these are summaries, not tax returns — errors correct themselves in the next cumulative submission, and nothing is finalised until year end. The standard quarters follow the tax year (to 5 July, 5 October, 5 January and 5 April); you can instead elect calendar quarters (to 30 June, 30 September, 31 December and 31 March), provided the election is made before you send the first update for that tax year. Either way, the deadlines are 7 August, 7 November, 7 February and 7 May.

File the year-end return. The final tax return brings together the quarterly data, adds any other income sources (employment, dividends, savings), applies reliefs and allowances, and is submitted through compatible software by 31 January following the end of the tax year — for 2026-27, by 31 January 2028. The tax payment deadlines are unchanged.

Penalties: what bites and when

For the 2026-27 tax year HMRC has confirmed a soft landing on reporting: there are no penalties for missing a quarterly update deadline in 2026-27 — though the updates still have to be sent before the year-end tax return can be filed. From the 2027-28 tax year the points-based regime applies — one penalty point for each missed quarterly update or tax return deadline, a fixed £200 penalty when you reach four points, and a further £200 for each missed deadline after that.

Late payment of the tax itself is penalised separately, and here 2026-27 is only partly soft: in your first year you have 30 days from the payment due date to pay in full or agree a payment plan before a penalty is charged. Outside that first-year concession the structure is 3% of the tax owed at day 15, a further 3% at day 30, and an annual rate of 10% a year on tax still outstanding. From 2027-28 the day 15 and day 30 charges each rise to 4%; the 10% annual rate is unchanged. Interest runs on top.

Exemptions and deferrals

Three routes take a landlord out of MTD for Income Tax:

• The £20,000 floor. Qualifying income of £20,000 or less means automatic exemption — no application needed.
• Digital exclusion. A landlord who cannot reasonably use software or the internet — because of age, disability, location or another good reason — can apply to HMRC for an exemption by phone or letter. HMRC aims to respond within 28 calendar days, and a refusal can be appealed within 30 days.
• Exempt and deferred categories. Several groups are automatically exempt, including personal representatives of someone who has died, trusts filing an SA900, non-resident companies filing an SA700, Lloyd's underwriters, ministers of religion, people receiving Married Couple's Allowance (born before 6 April 1935) or Blind Person's Allowance, people without a UK National Insurance number at the start of the tax year, and people unable to provide the information because of physical or mental incapacity where a UK power of attorney or legal deputy is in place. A temporary deferral until April 2027 covers taxpayers whose 2024-25 return included averaging relief, qualifying care relief, or the SA107 (trust income) or SA109 (residence/remittance) pages.

What landlords in scope should be doing now

The first-wave cohort is already inside the regime — the practical question is being ready for each 7th-of-the-month deadline as it comes (7 August 2026 is the first, followed by 7 November 2026), and wave-two landlords with 2025-26 gross income over £30,000 have until 6 April 2027 to get records into shape. The groundwork is the same in both cases: work out your qualifying income for the test year from your submitted return; choose recognised software from HMRC's finder; move rent and expense recording into it quarter by quarter rather than reconstructing at year end; and decide between tax-year and calendar quarters before the first update of the year is sent.

Clean tenancy paperwork makes the record-keeping side considerably easier — a written agreement stating the rent, payment dates and what is included ties each receipt in your software to its tenancy, and a proper inventory supports the expense side when repairs and replacements are claimed.

None of this changes how much tax a landlord pays — MTD is about when and how income is reported, not the rates or reliefs. But the reporting duty is now the law for the first wave, the second wave is a year away, and the penalty holiday on quarterly updates ends with the 2026-27 tax year. This page is general information about the rules as they stand; it is not tax advice, and decisions about your own affairs belong with an accountant or with HMRC directly.