MTD for rental income 2026

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Starting 6 April 2026, if your total income from property and self-employment is over £50,000 a year, you must stop using the old annual tax return system. Instead, you must keep digital records and send updates to HMRC every three months using special software.

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What is Making Tax Digital (MTD)?

Making Tax Digital is the government’s plan to move tax reporting online to make it more accurate. It is the biggest change to the tax system for years.

Currently, most landlords file one Self Assessment tax return a year. Under the new rules, you will need to send data to HMRC five times a year (four quarterly updates + one final declaration).

Who is affected and when?

The rules are being introduced in phases based on how much gross income (total income before you deduct expenses) you earn.

• From 6 April 2026: You must follow the new rules if your total income is over £50,000.
• From 6 April 2027: You must follow the new rules if your total income is over £30,000.
• From April 2028 (Planned): The government plans to extend this to those earning over £20,000.

Important Note: This income figure combines all your rental income plus any income you earn from being a sole trader (self-employed). It does not include wages from a job (PAYE).

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What do you actually need to do?

If you fall into the category starting in 2026, you will have three main new tasks:

1. Keep Digital Records You can no longer just keep a shoebox of receipts or a simple written logbook. You must record every rent payment and every expense (like repairs or insurance) in “compatible software” on your computer or smartphone.

2. Send Quarterly Updates Every three months, you must push a button in your software to send a summary of your income and expenses to HMRC. This tells them how you are doing throughout the year. The standard deadlines will be:

• 7th August
• 7th November
• 7th February
• 7th May

3. Submit a Final Declaration By 31st January the following year (the usual tax deadline), you must submit a final “End of Year” declaration. This confirms your final figures and adds any other income (like interest from savings) to calculate your final tax bill.

Do I need to buy software?

Yes, usually. HMRC does not provide its own software for this. You will need to use a commercial product (like Xero, QuickBooks, or apps specifically for landlords).

• If you love spreadsheets: You can still use Excel, but you will need “bridging software” to link your spreadsheet to HMRC’s system.

What happens if I don’t do it?

HMRC is introducing a points-based penalty system. If you miss a deadline for a quarterly update, you get a “point.” If you get enough points, you will be fined.

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