Making Tax Digital (MTD)
UK-wide
MTD stands for Making Tax Digital, HMRC's programme that requires businesses and landlords to keep their tax records digitally and send updates to HMRC through compatible software. For landlords, Making Tax Digital for Income Tax began on 6 April 2026 under the Income Tax (Digital Requirements) Regulations 2021, starting with those whose qualifying income is over £50,000.
Outside tax, MTD can also mean "month to date" in accounting reports. On this page, and in anything HMRC sends you, it means Making Tax Digital.
What does MTD mean for landlords?
MTD changes how often you report your rental income, not how much tax you pay. Instead of pulling a year of records together for one Self Assessment return, you keep digital records as you go, send HMRC a summary every quarter, and confirm the year's figures in a final declaration by 31 January. Tax is still paid on the same dates as before.
Is MTD only for Income Tax?
No. MTD began with VAT: every VAT-registered business has had to keep digital VAT records and file VAT returns through software since April 2022. MTD for Income Tax is the second stage, and it is the one that affects most landlords, because it covers property and self-employment income reported through Self Assessment.
Who does MTD apply to?
MTD for Income Tax applies to individual landlords and sole traders whose qualifying income, meaning gross property and self-employment income before expenses, is over £50,000 from April 2026, £30,000 from April 2027 and £20,000 from April 2028 (HMRC eligibility guidance). Property held in a limited company is outside it. Our guide to MTD for landlords covers the thresholds, deadlines and sign-up in full.
Why is HMRC bringing in MTD?
HMRC's stated aim is to cut avoidable errors. It puts the tax gap for Self Assessment businesses at around 18.5%, or £5 billion, and argues that keeping digital records and reporting regularly from software reduces mistakes (HMRC policy paper, updated September 2025).
Does MTD change how tax is calculated?
No. The threshold is tested on gross income, but your tax is still worked out on your profit after allowable expenses, at your usual rates. Mortgage interest is still relieved through the 20% tax credit. Each quarterly update gives HMRC a running picture of your position; the final declaration is what fixes the bill.
From working with self-managing landlords, the most common misunderstanding is that a well-kept spreadsheet is compliant on its own. It isn't until software sends the figures to HMRC digitally. August is recognised by HMRC for MTD quarterly updates on UK property income, and keeps your records as rent and expenses come in. See how MTD software for landlords works in August.
Frequently asked questions
What does MTD stand for?
In UK tax, MTD stands for Making Tax Digital, HMRC's programme for digital records and software-based reporting. In accounting reports, MTD can also mean month to date.
Do I need to sign up for MTD myself?
If your qualifying income puts you in scope, you can sign up yourself or through your accountant. Since September 2026, HMRC has also been signing up landlords over the £50,000 threshold who had not joined, and confirms it by letter or in their online account. Either way, you choose your own software.
What happens if I miss an MTD deadline?
For the 2026 to 2027 tax year, HMRC will not give penalty points for late quarterly updates, though late returns and late payments are still penalised. From 2027 to 2028, missed deadlines build up points towards a £200 penalty. Our guide to MTD penalties explains the system.
