Landlord taxes in 2026: what Making Tax Digital means if you rent out property
The Renters' Rights Act changed how you let a property. Making Tax Digital is quietly changing how you report the income from it. MTD for Income Tax started on 6 April 2026, and for a growing number of landlords the familiar once-a-year Self Assessment return is being replaced by digital record-keeping and quarterly filing. This guide explains who is caught, when, and what you actually have to do.
What Making Tax Digital actually is
Making Tax Digital for Income Tax (often shortened to MTD for Income Tax, or MTD ITSA) is HMRC's move away from the annual tax return. If it applies to you, three things change: you must keep your rental records digitally, send HMRC a short update every three months using compatible software, and finish the year with a Final Declaration instead of a Self Assessment return. It is a change of process, not a new tax - your bill is worked out the same way, you just report the numbers more often.
Does it apply to you? The one number that decides
Whether you are in or out comes down to your qualifying income, and this is where most landlords trip up. Qualifying income is your gross rental income - the full rent before you take off a single penny of mortgage interest, letting-agent fees, repairs or allowances. A property bringing in £55,000 of rent counts as £55,000, even if your actual profit after costs is a fraction of that.
If you also trade as a sole trader, that income is added to your rent to test the threshold. Wages taxed through PAYE, dividends, pensions and savings interest do not count. And if you own a property jointly, only your share of the rent goes into your figure - a couple splitting an £80,000 property 50/50 each count £40,000.
| From | Qualifying income over | Based on the tax year |
|---|---|---|
| 6 April 2026 | £50,000 | 2024 to 2025 |
| April 2027 | £30,000 | 2025 to 2026 |
| April 2028 | £20,000 | 2026 to 2027 |
So the first wave, live since April 2026, is landlords with gross rents above £50,000. If you are below the current threshold you carry on with Self Assessment for now - but the bar drops fast, and by April 2028 anyone with more than £20,000 of gross rent is in scope. It is worth knowing which year you will be pulled in.
What you actually have to do
Once you are mandated, the rhythm is four quarterly updates followed by a year-end declaration. Each update is a running summary of your rental income and expenses for the period, sent from MTD-compatible software. The standard quarters and deadlines are fixed.
| Quarter covers | Update due by |
|---|---|
| 6 April to 5 July | 7 August |
| 6 July to 5 October | 7 November |
| 6 October to 5 January | 7 February |
| 6 January to 5 April | 7 May |
After the fourth update you submit a Final Declaration by 31 January, which pulls together your property figures, claims any reliefs and reports any other income. That declaration is what replaces the old tax return. Your payment dates do not change - tax is still due by 31 January, with payments on account in July where they apply.
The mistakes that will cost landlords money
Three catch people out. First, testing the threshold against profit instead of gross rent, and wrongly assuming they are exempt. Second, leaving digital record-keeping until the deadline, then scrambling to reconstruct months of transactions. Third, ignoring the soft landing: there are no penalties for missing a quarterly deadline in the first year (2026 to 2027), but from the following year a points-based system bites - four missed deadlines triggers a £200 penalty, with £200 more for each miss after that. The habits you build in year one are the ones that keep you penalty-free later.
Get your paperwork right at the front end
Clean tax reporting starts with a proper tenancy set-up: a compliant agreement, a rent book and organised records from day one. Our Complete Landlord Pack builds all of it from your answers - agreement, written statement, rent book and notice templates - delivered instantly as PDF and Word. £49, one-off.
See the Complete Pack →Would you rather someone else filed it?
Quarterly filing is manageable, but it is four more deadlines a year on top of managing tenants. If you would sooner hand it over, our sister firm LOYALS runs an MTD filing service for landlords - digital records, quarterly submissions and the year-end declaration handled for you. Not sure you are even caught yet? Their free MTD eligibility checker tells you in under a minute. TenancyTemplates customers get 50% off the first year with code TT50, and you can book a free MTD call to check exactly when you will be mandated and what it will cost.
Frequently asked questions
I am under £50,000 - can I ignore this? For now, yes, but check your gross rent against the £30,000 line for April 2027 and £20,000 for April 2028. Many landlords who feel safe today are in scope within two years.
Does MTD change how much tax I pay? No. It changes how and how often you report. The tax is calculated the same way and due on the same dates.
What if I have a job as well as rental income? PAYE salary does not count towards the qualifying-income threshold - only your rental and any sole-trader income do.
Do I still fill in a Self Assessment return? If you are in MTD, no - quarterly updates plus the Final Declaration take its place.
This guide is general information for landlords in England, not tax or legal advice for your specific circumstances. Check the current rules on GOV.UK or speak to an accountant before acting.