Who Must Register and Key Start Dates for MTD
MTD for landlords applies based on your total gross income from property and self employment combined.
- From April 2026, landlords with qualifying income over £50,000 will need to report under MTD;
- From April 2027, this reduces to £30,000.
Income means gross income before expenses (ie gross rental income).
If your rental income is below the threshold, you do not need to join immediately. However, you may hit the thresholds in the following year in which case you have to join MTD one year later.
If you cross the threshold, you must register and use compatible software. It will no longer be optional.
MTD Changes Reporting, Not Payment Deadlines
One key point many landlords misunderstand is over the payment of tax. MTD changes how often you report to HMRC. It does not change when you pay your tax.
Quarterly updates are reporting submissions only. They are not tax bills. You are not required to make a tax payment every quarter just because you submit an update.
Tax payment deadlines remain the same. Payments on account are still due on 31 January and 31 July. Any balancing payment is still due on 31 January following the end of the tax year.
MTD increases the frequency of reporting, but the tax payment timetable does not change.
Choosing the Best MTD Software for Landlords
MTD requires compatible software. HMRC will not accept manual submissions through the old online portal.
Many landlords currently use spreadsheets. Under MTD, spreadsheets can still be used, but they must link to bridging software that allows digital submission.
When choosing software, consider:
- Ease of use
- Cost
- Ability to handle multiple properties
- Integration with bank feeds
- Support and training
Some software is built specifically for landlords. Others are general accounting systems that include property features. Some very good general systems that we recommend include Xero, Sage and Quickbooks. All of these softwares will more than handle your MTD reporting requirements.
Choosing the right system early makes the transition smoother.
How MTD Transforms Property Income Reporting
MTD is more than a technical change. It changes the rhythm of tax reporting.
Instead of gathering everything in January, landlords will submit updates every quarter. These updates show income and expenses for that period.
There will still be an end-of-year process to finalise the figures, make any necessary adjustments, and claim eligible reliefs through structured annual accounts preparation.
The benefit is that landlords may have a clearer view of their tax position throughout the year. The downside is increased admin.
If records are not kept regularly, quarterly submissions could become stressful.
Common Mistakes Landlords Must Avoid
There are a few risks we are already seeing.
- Leaving bookkeeping until the end of the quarter.
- Using incompatible software.
- Failing to register on time.
- Mixing personal and rental bank transactions.
- Assuming the rules do not apply.
Another common mistake is underestimating how much time this will take. Even small portfolios require organised digital records.
Step by Step Preparation Guide for Landlords
Here is a practical plan to get ready.
First, review your rental income. Confirm whether you are likely to cross the £50,000 (or £30,000 for 27/28) threshold.
Second, check how you currently keep records. Paper records will not be compliant. Spreadsheets will need bridging software.
Third, research and choose MTD compatible software. Do not leave this until the last minute.
Fourth, separate rental and personal finances if they are currently mixed. A dedicated bank account helps enormously. Otherwise you’ll be disentangling personal (non-MTD transactions) away from reportable MTD transactions. It’s much easier to keep a dedicated business bank account and not to mix business and personal in the same pot.
Fifth, start keeping digital records now. Even if MTD does not apply until 2027, early preparation makes the change far easier.
Finally, speak to your accountant. The structure of ownership and the way income is reported may need reviewing. For example, you may want to think about incorporating, or alternatively you may want to think about establishing different ownership percentages (via declarations of trust).
Do Landlords Need to Register for MTD?
Yes, if their qualifying income exceeds the threshold once MTD (“Making Tax Digital”) becomes mandatory for them. Registration will be required and quarterly reporting will follow.
When Does MTD for Landlords Start?
For landlords with income over £50,000, it starts in April 2026. For those over £30,000, it starts in April 2027.
Can I Use Excel for MTD Submissions?
Excel can still be used for record keeping, but it must link to approved bridging software that submits data digitally to HMRC. You will need some kind of ‘middleware’ software if you want to keep using Excel.
What If My Income Falls Below the Threshold After I Register?
If your income drops below the threshold, you may still be required to continue under MTD unless HMRC confirms otherwise. HMRC will inform you if they want you leave MTD – you should just stop reporting unilaterally.
Is MTD Mandatory If I Only Own One Rental Property?
The requirement to be in MTD depends on your income level, not the number of properties. If your gross rental income exceeds the threshold, MTD will apply even if you only own one property.
Should I Manage MTD Myself or Hire an Accountant?
Some landlords will feel comfortable managing software and quarterly submissions themselves. Others will prefer professional support.
An accountant can ensure compliance, reduce errors, and provide tax planning advice. The more complex your portfolio, the more valuable advice becomes.
Conclusion
MTD for landlords is coming. It will not disappear. The key question is how prepared you are when it arrives.
The landlords who adapt early will find it manageable. Those who ignore it may find themselves rushing to comply under pressure.
If you want help reviewing your rental income, choosing software, or preparing for MTD, book a call with our team. We will guide you through the process and make sure you are ready.
People Also Ask:
What counts as qualifying income for MTD?
Gross income from self employment, partnerships and property combined, before expenses.
Do I have to submit four tax updates per year?
You must submit four quarterly updates, but these are reporting updates, not tax payments.
Can I continue using my spreadsheets?
Yes, but only if they link to bridging software that can submit data digitally to HMRC.
Do I need a business bank account for MTD?
It is not mandatory, but it makes bookkeeping much easier and helps avoid errors.
What happens if I miss a quarterly update deadline?
Late submissions may lead to penalties once the new penalty system applies.
What counts towards my gross income for Making Tax Digital?
Turnover before expenses, including all qualifying business and property income.
