Making Tax Digital for Landlords: What You Need to Do Before April 2026

 Introduction: A New Era of Tax Reporting Is Coming

If you’re a landlord or self-employed individual with property or trading income over £50,000, April 2026 will mark a major change in how you manage your tax affairs. That’s when Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) comes into force.

Initially applying to higher-earning landlords and unincorporated businesses, MTD for ITSA will progressively expand to include smaller property businesses from 2027 onwards—and potentially those earning just £20,000+ before the current parliament ends.

Whether you let out a single buy-to-let or manage a sizeable portfolio, this blog explains:

• Who MTD applies to
• What changes you’ll need to make
• When it all starts
• How to get ready now

 What Is MTD for ITSA?

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is part of HMRC’s plan to modernise the tax system.

From April 2026, landlords will no longer file a single annual tax return. Instead, they must:

• Keep digital records
• Submit quarterly updates to HMRC
• Use HMRC-approved software
• File a final annual declaration

The goal is to reduce errors, encourage real-time reporting, and improve compliance.

 Who Is Affected and When?

From 6 April 2026:

• Applies to unincorporated landlords and businesses with combined income over £50,000 (before expenses)
• Includes those with multiple property businesses, trading income, or a mix

From 6 April 2027:

• Threshold drops to £30,000
• Broader rollout planned, but no firm date yet for £20,000+ earners

Example: A landlord has £35,000 in rental income and £21,000 from freelancing.  Total income = £56,000 → MTD for ITSA applies from April 2026

 Important:

Once you’re in MTD, you stay in, even if your income later falls below the threshold.

 Current Rules vs MTD: What’s Changing?

 Software & Record-Keeping Requirements

Landlords must use MTD-compatible software to:

• Record individual transactions digitally (not summaries)
• Submit quarterly updates automatically
• Generate the end-of-year declaration

 Do you need to scan receipts?

No. You can keep paper copies of receipts/invoices—but the financial transaction must be recorded digitally.

 Will there be free software?

Yes. HMRC will offer free software for landlords with straightforward affairs (similar to its PAYE tools for small employers).

More details:
HMRC: Sign Up for MTD for Income Tax

 When Do You Need to Report?

Quarterly updates must be submitted for the following periods:

Landlords can choose to align with calendar quarters (e.g. 1 April – 30 June), which may make reporting easier.

After the year ends, a final declaration (similar to today’s tax return) is submitted, where you:

• Make accounting adjustments
• Claim reliefs and allowances
• Declare non-property income (e.g. savings, dividends)

 Jointly Owned Properties

Landlords who co-own properties will be pleased to know that the system has been simplified for joint ownership.

From April 2026, joint owners:

• Can exclude joint expenses from quarterly updates
• Are allowed to keep less detailed records of jointly owned income

The full year’s income and expenses must still be submitted in the final declaration.

 How to Know If You’re In from April 2026

Your 2024/25 self-assessment return (due by 31 Jan 2026) is the trigger.

If your combined property and trading income exceeds £50,000 in 2024/25, you’ll need to comply with MTD for ITSA from 6 April 2026.

Tip: Income is measured before deducting expenses, and you must include your share of joint property income.

 What Happens to Payments on Account?

Under MTD:

• The method of tax calculation stays the same
• You’ll still pay tax by 31 January and 31 July (if your liability is over £1,000)

MTD affects how you report, not how much you owe.

 Can You Join Early? Try the MTD Pilot

HMRC is running a pilot programme so eligible landlords and business owners can get ahead of the 2026 deadline.

If your affairs are straightforward and you want to test the process early, this is a great way to:

• Learn how digital filing works
• Choose software
• Build new habits before it becomes mandatory

Join the MTD for ITSA Pilot

 Common Challenges and Pitfalls

 1. Manual record-keeping

Throwing receipts into a shoebox until January won’t work anymore. You’ll need to record transactions in real time using digital tools.

 2. Software confusion

Not all bookkeeping software is MTD compatible. Choosing the wrong tool can mean non-compliance.

 3. Leaving it too late

Landlords need time to:

• Train on software
• Adjust their processes
• Decide whether to manage MTD themselves or use an accountant

 Practical Steps to Prepare Now

Here’s what you can do today to prepare for MTD:

 Review your total property + trading income for 2024/25
 Begin keeping digital records (even if MTD doesn’t yet apply)
 Research or trial MTD-compatible software
 Speak to your accountant about quarterly reporting
 Consider joining the MTD pilot
 Budget for software or agent fees

 Final Thought: Don’t Delay, Digitise

Whether you’re a single-property landlord or managing a larger portfolio, MTD will transform how you deal with tax.

The earlier you prepare, the easier it will be to adapt and stay compliant. Waiting until the last minute could mean stress, errors, or penalties.

 Need Help Going Digital? Merranti Can Guide You

At Merranti Accounting, we help landlords and business owners:

• Transition to MTD with minimal disruption
• Select and set up the right software
• Manage quarterly submissions
• Understand how MTD affects their financial strategy

Whether you want us to handle reporting or simply support your in-house process, we’ve got the expertise to help you adapt confidently.

 Book a Free MTD Readiness Review

Contact Merranti Accounting
 Learn more: gov.uk/making-tax-digital