August 6, 2025
By Merranti

MTD ITSA and Property Landlords: What You Need to Know

With Making Tax Digital for Income Tax Self Assessment (MTD ITSA) rolling out from April 2026, property landlords will be among the first mandated to adopt digital record-keeping and quarterly submissions.

But many landlords still have questions:

“Do I have to sign up?”
“What if I own a property jointly?”
“Do I need separate software?”
“How do I handle agents and rent statements?”

This blog answers those questions and more — plus explains how Merranti Accounting is helping landlords across the UK stay compliant, stress-free, and ahead of the game.

Who Needs to Comply with MTD ITSA?

From 6 April 2026, if you have gross rental income (before expenses) of over £50,000, you’ll need to:

✅ Keep digital records
✅ Submit quarterly updates to HMRC
✅ File a year-end final declaration

This applies to UK and non-UK landlords, whether you rent out:

Buy-to-let properties
Holiday lets
Commercial property
HMOs
Rooms in your own home (if income exceeds the threshold)

If your gross rental income is below £50,000 in 2024/25 (the reference year), you won’t need to join until April 2027 (£30k threshold) or April 2028 (£20k threshold).

Important: It’s Gross Income, Not Profit

Let’s say you earn:

£2,000/month rental income = £24,000/year
Mortgage interest, insurance, repairs = £15,000/year

Your profit may be £9,000, but for MTD ITSA, HMRC looks at your £24,000 gross income — this determines eligibility.

Jointly Held Property – Do You Still Need to Comply?

Yes. HMRC considers your individual share of gross rental income when applying the threshold.

Example:

You and your spouse own a property 50/50
Total rent = £60,000/year
Your share = £30,000

➡️ You will fall under the 2027 threshold (£30k), but not yet under 2026.

If you own multiple jointly held properties, your combined share is what counts.

Do I Need Separate Software for Each Property?

No. You can track multiple properties in one MTD-compliant software system — but you do need to keep records separated per property.

Each property should have:

Rent received (gross)
Letting agent statements
Repairs and maintenance
Mortgage interest (if deductible)
Other expenses (utilities, insurance, legal fees, etc.)

Merranti helps set up your accounting software (e.g. Xero) to categorise income and costs by property, so your records are clear and submission-ready.

What About Letting Agents?

Many landlords rely on letting agents, who provide monthly rent statements showing:

Rent received
Agent fees deducted
Maintenance charges

You must still digitally record this information yourself — ideally with a copy of the agent statement attached (Hubdoc or similar).

Overseas Landlords

If you live abroad but rent property in the UK, you are still required to comply with MTD ITSA — as long as your UK rental income exceeds £50,000.

We offer full remote MTD support for expat landlords — including time zone-friendly meetings and document uploads from abroad.

Quarterly Updates for Property Income

Each quarter, you’ll need to submit a summary of:

Total rental income
Total allowable expenses
Net profit

These updates must be submitted within one month after the quarter ends. We’ll remind you and process them for you — or set up automated submission where appropriate.

What About Furnished Holiday Lets?

Furnished Holiday Lets (FHLs) are included in MTD ITSA — even though they have different tax rules.

You must:

Track FHL income separately
Maintain detailed digital records (bookings, platforms, etc.)
Comply with quarterly updates and year-end declaration

Merranti can help you tag each property as either residential let or FHL for accurate tax treatment.

What Happens at Year-End?

After four quarterly updates, you’ll submit a final declaration that:

Pulls together your full rental figures
Includes other income (self-employment, dividends, pensions)
Adjusts for accruals, capital allowances, and disallowables
Produces your final tax bill

Important: The final declaration must be reviewed and approved by you, under new professional conduct rules.

What If I Sell a Property?

Selling a property does not immediately exempt you from MTD.

If your income two years prior was over the threshold, you still need to comply — even if your rental income is now zero. You can apply to exit after three consecutive years below the threshold.

How Merranti Supports Landlords

We’ve developed an MTD landlord package that includes:

Digital Record-Keeping Setup

Xero software with custom categories
Hubdoc for receipt/statement capture
Agent statement automation

Quarterly Submission Support

Reminders via email/text/WhatsApp
Accountant-reviewed quarterly reports
Submission direct to HMRC

Final Declaration Review

Adjustments for mortgage interest, FHLs, capital expenses
Integration with your wider tax position
Signed and submitted on your behalf

Ongoing Advice & Property Tax Strategy

How to structure ownership (LLP, Ltd Co)
Capital gains planning
Mortgage relief optimisation
Exit strategies and inheritance considerations

Summary: Key Points for Landlords

If your rental income exceeds £50,000 (before expenses), MTD ITSA applies from April 2026
Joint property owners are assessed individually
Separate records per property are required, but one software system can manage all
Quarterly updates are summary-only, not full tax returns
Final declaration includes property plus other income
Merranti provides full setup, software, submission, and tax advice

Get Ready Now — Avoid the Rush Later

Over 1.6 million landlords will be affected by MTD ITSA. Software providers are already tightening support queues. Avoid last-minute panic.

Merranti’s MTD Landlord Package starts from £20/month (excluding software) and includes everything you need to stay compliant and stress-free.

Let’s make your portfolio MTD-ready today

Find More About MTD ITSA Here