MTD for Landlords: What Making Tax Digital Means for Your Property Income

MTD for Landlords: how this affects reporting

Making Tax Digital (MTD) is the biggest change to UK income tax reporting in a generation, and landlords are squarely in scope. If you let out property, HMRC will require you to keep digital records and report your rental income every quarter rather than once a year.

This guide focuses on what MTD means specifically for landlords: the property income thresholds, how to work out whether you’re caught, the records you need to keep per property, and the expenses you can claim.

For the wider background on how MTD works, we link out to our fuller guides rather than repeat them here.

So, if you are new to MTD? Start with our Making Tax Digital Guide for the full explainer on how the scheme works, the transition to digital tax, and the key dates. This guide assumes you already know the basics and zeroes in on property income.

Does MTD Apply to You as a Landlord?

MTD for Income Tax Self Assessment (ITSA) applies to unincorporated landlords (including sole traders and partnerships) based on gross income, not profit. The thresholds are:

• From 6 April 2026: landlords with combined gross property and/or self-employment income over £50,000 must comply.
• From 6 April 2027: the threshold drops to £30,000.
• From April 2028: HMRC has confirmed it plans to extend MTD to those with income over £20,000.

This applies whether you own one flat or a large portfolio. Below the threshold, MTD is optional. Because the thresholds fall each year, it’s worth checking your income annually — a rent increase or a new property could bring you into scope.

How to Work Out Your Total Property Income for the Threshold

This is where landlords most often get caught out, so it’s worth doing carefully. The threshold is based on gross rental receipts before any expenses or deductions, combined with any self-employment income.

Add together:

• All rental receipts for the tax year, before deducting expenses.
• Your share of income from any jointly owned properties (not the whole amount).
• Any self-employment income, before expenses.

Example: if you earn £12,000 from a flat in Manchester and £20,000 from a house in Bristol, your gross property income is £32,000 — over the 2027 threshold. Add £19,000 of contracting income and your total qualifying income is £51,000, bringing you into scope from April 2026.

Because it’s gross income, landlords with modest profits but high turnover are often surprised to find they qualify.

Keeping Digital Records for Each Property

Under MTD you must keep your property records digitally, using HMRC-recognised software or spreadsheets linked to bridging software. A scanned receipt on its own doesn’t count: the transaction details must be entered and stored digitally. (For which tools qualify, see our guide to MTD accounting software.)

For landlords specifically, HMRC expects you to record, per property:

• Rental income — the date, amount and which property each payment relates to.
• Allowable expenses — repairs, letting agent fees, insurance, utilities and so on, allocated to the right property.
• Property identification — a clear reference for each property (the address, or HMRC Property Reference Number where issued).

If you own several properties, the key discipline is keeping income and costs separated by property rather than lumped together: this is what makes your quarterly updates accurate.

Allowable Expenses Landlords Can Claim

Digital record-keeping doesn’t change what you can claim, but it does make it easier to capture. Allowable property expenses include:

• Mortgage interest (relieved as a 20% tax credit for residential lets)
• Letting agent and management fees
• Repairs and maintenance (but not improvements)
• Landlord insurance
• Utility bills and council tax you pay
• Ground rent and service charges
• Legal and professional fees relating to letting

For jointly owned property, each owner claims their share. HMRC’s Property Income Manual has the full list. If you’re unsure what qualifies, speak to us — getting the split right protects both your tax position and your MTD figures.

What You’ll Submit Each Quarter

Instead of one annual return, MTD landlords send HMRC four quarterly updates plus a year-end final declaration. Each quarterly update is simply a running total of property income and expenses for the three-month period. It does not calculate your final tax bill.

Most MTD software connects your bank feed and allocates rent and costs to the right property and period automatically, so quarterly submission is a review-and-confirm task rather than a re-keying exercise. At year end, the final declaration replaces your old Self Assessment return and confirms reliefs and adjustments (such as mortgage interest relief) before HMRC issues your tax calculation.

For the full quarterly timeline, penalty regime, registration steps and software options (all of which apply to landlords and other taxpayers alike) see our Making Tax Digital Guide.

Getting Ready — and How JML Can Help

The landlords who transition smoothly are the ones who set up compliant software early, migrate their records before their first quarter, and run a practice submission. If you use a letting agent or accountant, give them digital access well ahead of your start date.

JML works with landlords across Surrey and Hampshire to get MTD-ready without the stress. We can help you choose software, get your property records in order, and handle quarterly submissions on your behalf.

So what are the next steps?

• Learn how the scheme works end-to-end: Making Tax Digital Guide
• Compare compliant tools: What is MTD Accounting Software
• Let us handle it for you: Making Tax Digital service
• Contact us at JML to talk through your portfolio.

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