Making Tax Digital for landlords: dates, rules, penalties

What is Making Tax Digital for landlords?

Making Tax Digital for Income Tax, often shortened to MTD for landlords, is HMRC’s new way of reporting rental and self-employment income. In place of one Self Assessment return a year, you keep your income and expense records in software, send HMRC a short summary every three months and then submit a tax return through the same software.

It applies to individual landlords and sole traders who are registered for Self Assessment. This guide covers what a landlord has to do and when. It is not tax advice, and it does not cover how much landlord tax you owe, which depends on your whole income and your expenses.

HMRC’s guidance says you still submit one tax return a year by 31 January and pay your tax bill by the usual deadline. What changes is how you keep records and how often you report.

Sources: GOV.UK: use Making Tax Digital for Income Tax, before you use this guide

When does MTD for landlords start?

It depends on your qualifying income. Landlords and sole traders with qualifying income over £50,000 had to start on 6 April 2026. Those over £30,000 start on 6 April 2027, and those over £20,000 on 6 April 2028.

HMRC works out which group you are in from a tax return you have already filed. For the April 2026 start it looked at the 2024 to 2025 return. A landlord whose rents first pass a threshold in a later year joins from a later April.

You need to be registered for Self Assessment to sign up, and you can do it yourself on GOV.UK or have an agent do it. From September 2026 HMRC has been signing up people who should have joined for 2026 to 2027 and had not done so themselves.

Sources: GOV.UK: use Making Tax Digital for Income Tax, before you use this guide · GOV.UK: work out your qualifying income for Making Tax Digital for Income Tax

What counts as qualifying income?

Qualifying income is your total income from self-employment and property before expenses. HMRC also calls this turnover. For a landlord that means the rent received, not the profit left after mortgage interest, repairs and agent fees.

The two kinds of income are added together. HMRC’s example is a person with £25,000 of rental income and £27,000 from self-employment, whose qualifying income is £52,000. That person is over the £50,000 threshold even though neither source is.

Other income is left out. HMRC lists wages taxed through PAYE, dividends, the State Pension, private pensions and a share of partnership profits as income that does not count.

Sources: GOV.UK: work out your qualifying income for Making Tax Digital for Income Tax

Jointly owned property

If you own a rental property with someone else, only your share of the rent counts towards your qualifying income. HMRC’s example is a property owned jointly with a sibling that brings in £50,000 a year, shared equally. Each owner’s qualifying income is £25,000.

Each owner is assessed separately, so one may be within Making Tax Digital while the other is not. To take our own example, a couple who each receive £26,000 of a £52,000 rent are both under the £50,000 threshold, and both under £30,000 too, but over the £20,000 threshold that applies from April 2028 if their rents stay the same.

HMRC allows some shortcuts for jointly let property. You only record your own share. You can keep less detailed records, with a single entry for each category of income in an update period, and you can leave the expenses for jointly let properties out of your quarterly updates as long as you add them before you submit your tax return.

Sources: GOV.UK: work out your qualifying income for Making Tax Digital for Income Tax · GOV.UK: use Making Tax Digital for Income Tax, create digital records · GOV.UK: use Making Tax Digital for Income Tax, send quarterly updates

Quarterly updates and their deadlines

You send four updates a year, each due by the 7th of the month after the quarter ends. An update gives HMRC the totals for each category of income and expense. HMRC does not receive your individual receipts or invoices.

Each update is cumulative, running from the start of the tax year to the end of that quarter. You can choose calendar quarters, which end on the last day of the month, if that suits your records better. The deadlines are the same either way.

For landlords who started in April 2026, the first update was due by 7 August 2026. The next three are due by 7 November 2026, 7 February 2027 and 7 May 2027, and the tax return for the year is due by 31 January 2028.

Sources: GOV.UK: use Making Tax Digital for Income Tax, send quarterly updates · GOV.UK: use Making Tax Digital for Income Tax, before you use this guide

Digital records and software

You must use software that works with Making Tax Digital. A paper cashbook does not meet the rules, and a spreadsheet does only when it is connected to HMRC through what HMRC calls bridging software. Other products create the records for you by linking to your bank account, scanning receipts or taking manual entries.

HMRC says free products are available for people with simple tax affairs, though they may have limits, such as a cap on the number of transactions. Its software finder on GOV.UK lists what each product supports. Check that the one you choose handles UK property income and any other income you have to report.

Create each record as close to the date of the rent or expense as you can, and in any case before you send the update for that quarter. Records must be kept for at least five years after the 31 January deadline for the tax year.

Sources: GOV.UK: find software that’s compatible with Making Tax Digital for Income Tax · GOV.UK: use Making Tax Digital for Income Tax, create digital records

Penalty points and late payment penalties

Late submissions earn points, not an immediate fine. You get one point for each quarterly update or tax return you send late. At four points you get a £200 penalty, and another £200 for every further deadline you miss while you are at four points.

The first year is gentler. HMRC will not give penalty points for late quarterly updates in the 2026 to 2027 tax year. The updates still have to be sent before you can submit the tax return, and a late tax return or late payment is still penalised.

A point below the threshold is removed automatically 24 months after the missed deadline. Once you are at four points, they are cleared only when you have sent everything on time for 12 months and submitted anything outstanding from the previous 24 months.

Paying late is penalised separately, and the charge grows the longer the tax is unpaid. For 2026 to 2027, HMRC’s table shows no penalty up to 15 days late, 3% of the tax owed at day 15 for payments 16 to 30 days late (or nothing in your first year), and from day 31 a further 3% of what was owed at day 30 plus 10% a year, charged daily. For 2027 to 2028 the 3% figures become 4%. Agreeing a payment plan with HMRC pauses the penalties while you keep to it.

Sources: GOV.UK: penalties for Making Tax Digital for Income Tax

Who is exempt?

You are automatically exempt if your qualifying income is £20,000 or less. HMRC also lists people without a National Insurance number, and some narrow groups such as trustees and personal representatives.

You can apply for an exemption if you are digitally excluded. HMRC’s test is that it is not reasonable for you to use compatible software because of your age, health, disability, religious beliefs or location. You apply by phone or post through the Self Assessment helpline, and HMRC aims to reply within 28 days.

Some people have a temporary exemption until at least April 2027 because of particular items on their tax return. HMRC’s guidance on exemptions lists them. Do not assume you are exempt because you use an accountant or have one property. The test is income.

Sources: GOV.UK: find out if you can get an exemption from Making Tax Digital for Income Tax

What landlords should do now

Start from last year’s tax return, because that is what HMRC uses. If you are close to a threshold, prepare as though you are over it. An accountant can confirm your position and can sign you up and send updates for you.

TenancyDesk does not do tax, bookkeeping or rent tracking. It keeps the compliance record for each property, the certificates, deadlines and notices, and sits alongside whatever tax software you choose.

• Add up the rent you received before expenses, plus any self-employment turnover, from your last tax return.
• For jointly owned property, count your share of the rent.
• Compare the total with £50,000, £30,000 and £20,000 to find your start date.
• Choose compatible software, or bridging software if you want to keep a spreadsheet.
• Sign up on GOV.UK or ask your agent to, and put 7 August, 7 November, 7 February and 7 May in your diary.
• Keep tax records separate from your compliance paperwork. Our landlord certificates checklist covers the safety documents.
• If you are new to letting, read how to become a landlord and the new landlord rules for 2026.
• Note the other new yearly cost: the landlord database fee of £65 a property, from 15 December 2026.

Sources: GOV.UK: use Making Tax Digital for Income Tax, before you use this guide · GOV.UK: work out your qualifying income for Making Tax Digital for Income Tax

Common questions