Making Tax Digital for Landlords: Rules and Thresholds

Landlords with gross property and self-employment income above £50,000 had to start Making Tax Digital (MTD) for Income Tax on 6 April 2026. The threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028, so many London landlords who are outside the rules today will be inside them within two years.

This guide focuses on what MTD means for people who let property: which income counts towards the threshold, how joint ownership works, what you must send to HMRC and how to get ready. For the wider picture, see our complete guide to Making Tax Digital for Income Tax.

MTD for landlords at a glance

• Who: landlords whose qualifying income is above the threshold for that tax year.
• What changes: digital records, quarterly updates and a final declaration instead of one annual return.
• When: 6 April 2026 (over £50,000), 6 April 2027 (over £30,000) and 6 April 2028 (over £20,000).
• Not affected: landlords whose qualifying income is £20,000 or less, and property held inside a limited company, which is taxed under Corporation Tax.

Which income counts towards the threshold?

Qualifying income is your gross income from self-employment and property in a tax year, before any expenses. For landlords that means the total rent you receive, not your profit. A landlord who collects £36,000 of rent and pays £20,000 in costs has qualifying income of £36,000, even though the taxable profit is much lower.

Income from different sources is added together. If you let property and also work as a sole trader, both turnover figures count. Salary, pensions, dividends and interest do not count towards the threshold, although they are still taxed in the usual way.

Jointly owned property

If you own property with a spouse or partner, only your share of the rent counts. Spouses and civil partners who own jointly are normally treated as splitting the income 50/50 unless they have made a declaration to HMRC that reflects unequal ownership. That can keep each person below the threshold, so check how your ownership is recorded.

Worked examples

What you have to do under MTD

1. Keep digital records. Record rent received and expenses in compatible software or a connected spreadsheet.
2. Send quarterly updates. Each update summarises income and expenses for the quarter. The standard deadlines are 7 August, 7 November, 7 February and 7 May.
3. Make a final declaration after the tax year ends, which confirms your total income and replaces the traditional annual return process.
4. Pay your tax as normal. Payment dates on 31 January and 31 July do not change.

Landlord expenses and the digital record

Your records need to show allowable costs such as letting agent fees, repairs, insurance, ground rent, service charges and accountancy fees. Mortgage interest is not deducted from rent. It receives a 20% tax credit instead, so record it separately. If your property income is small you may choose the £1,000 property allowance rather than claiming expenses, but you cannot claim finance cost relief if you do.

Keep tenancy agreements, rent statements, receipts and bank statements. Digital copies are fine and make year-end work far quicker. Our landlord tax guide explains the main reliefs in detail.

How to prepare now

• Add up your gross rent and any self-employment turnover to see when you fall into MTD.
• Separate your landlord bank account from personal spending.
• Choose MTD-compatible software or ask your accountant to submit for you.
• Build a simple monthly routine: record rent, log expenses, reconcile the bank.
• Agree with your accountant who submits each quarterly update and when.

Making Tax Digital for London landlords

London landlords are more likely than most to cross the thresholds because rents are higher. A single two-bedroom flat in Newham or Lewisham can produce more than £20,000 of rent a year, and a small portfolio across Southwark, Croydon and Ealing quickly passes £30,000. If that sounds familiar, plan for April 2027 now rather than waiting.

We prepare landlord tax returns and handle MTD updates for property owners in every London borough. See our landlord accountants by borough, or our Making Tax Digital service.

Common mistakes landlords make with MTD

• Assuming profit, not gross rent, decides whether MTD applies.
• Forgetting that a second income, such as freelance work, counts too.
• Mixing personal and rental money, which makes digital records messy.
• Leaving mortgage interest out of the records.
• Waiting until the deadline to learn the software.

A year under MTD: a landlord’s timeline

To see how this works in practice, take a landlord with two flats in Lambeth and £34,000 of annual rent who becomes subject to MTD from April 2027. Their year would look like this:

Between those dates the landlord simply keeps the records up to date. Most of the work is a ten-minute monthly routine: record the rent that arrived, log expenses such as repairs or agent fees and reconcile the bank. Using an accountant to submit means the deadline is handled for you.

Choosing software or an accountant-led service

HMRC publishes a list of software that can connect to its MTD service. For a landlord with a handful of properties, a simple bookkeeping package with bank feeds is usually enough. Many landlords prefer to delegate: they upload statements, the accountant reviews, submits the quarterly update and confirms the figures. If you have several properties or a mix of rent and self-employment income, a bookkeeping service that categorises transactions will save you time and reduce mistakes.

What happens if you miss an update?

HMRC has said it will use a points-based penalty system for late quarterly submissions from the 2027/28 tax year, similar to the system already used for VAT. Late payments of tax continue to attract interest and penalties. The sensible approach is to treat each quarterly deadline as fixed and put a reminder in the calendar a week before.

Landlord MTD checklist

• Total your gross rent for the last full tax year and compare it with the thresholds.
• Check how joint property income is recorded with HMRC.
• Open a separate bank account for rent if you have not already.
• Gather agent statements, repair invoices and mortgage interest certificates in one folder.
• Decide whether you or your accountant will submit each quarter.
• Put the four update dates in your diary.

Frequently asked questions

Do I need MTD if I only own one buy-to-let?

Only if your qualifying income is above the threshold for the year. A single let with gross rent of £18,000 is below the £20,000 threshold that applies from 2028.

Does MTD apply to property held in a limited company?

No. MTD for Income Tax applies to individuals. A company is taxed under Corporation Tax and files accounts and a CT600 instead.

What are the quarterly update deadlines?

The standard dates are 7 August, 7 November, 7 February and 7 May, covering each three-month quarter of the tax year.

Can my accountant file MTD updates for me?

Yes. We keep your records, submit the quarterly updates and complete your final declaration for a fixed fee.

What if my rent falls below the threshold?

HMRC looks at the qualifying income for an earlier tax year to decide whether you must join, so a one-off dip does not always remove you straight away. Ask us to check your position.