Making Tax Digital for landlords

Byline: Written by the August editorial team. Last reviewed August 2026.

Making Tax Digital for Income Tax has applied to UK landlords since 6 April 2026. If your qualifying income, meaning gross rental and self-employment income combined, exceeded £50,000 in 2024–25, you must keep digital records and send HMRC four quarterly updates a year through recognised software, followed by a final declaration. The first update was due on 7 August 2026 and the next falls on 7 November. This guide covers who is in scope, the deadlines, how the quarterly cycle actually works, penalties, exemptions, and what to do if you have not filed yet.

If you have missed an update

Nothing is lost, and you are in large company. HMRC put more than 864,000 sole traders and landlords in this first phase and reported that a substantial proportion had still not filed in the fortnight before the August deadline.

HMRC is not issuing penalty points for late quarterly updates during 2026/27, so a missed update in the first year carries no points. That easement is narrower than it sounds: it does not extend to the final declaration, and late payment penalties and interest apply as normal throughout.

Every quarterly update still has to be filed before you can submit for 2026/27, so a skipped quarter is deferred work rather than cancelled work. Because updates are cumulative from 6 April rather than discrete three-month snapshots, filing the November update brings the year to date up to 5 October and absorbs the period you missed. You do not file August's update separately and then November's.

The order of work, starting from nothing: confirm you are in scope using your 2024–25 qualifying income, choose recognised software and sign up through it rather than on the HMRC website, import the tax year from 6 April, then file by 7 November. From supporting landlords through the first cycle, the step that consumes the time is not the submission, which takes minutes, but reconstructing April to July from bank statements after the fact. That is the argument for a bank feed over manual entry, and for starting now rather than in the first week of November.

If you are starting from scratch, August imports the tax year from 6 April through an open banking connection, so April to July is reconstructed from your bank data rather than by hand. You can set it up free and be ready well before 7 November.

What Making Tax Digital is

Making Tax Digital is HMRC's programme to move tax reporting online, intended to reduce errors and give taxpayers a view of their position through the year rather than a single reckoning each January. For landlords it means keeping digital records and sending HMRC a summary of rental income and expenses four times a year, followed by a final declaration that replaces the old Self Assessment return.

It follows Making Tax Digital for VAT, which has applied to VAT-registered businesses since 2019. Income tax for landlords and sole traders is the next stage.

Making Tax Digital does not change how tax is calculated, and it does not change when you pay. The same expenses are allowable, the payment dates remain 31 January and 31 July, and your accountant can still file on your behalf. What changes is how records are kept and how often they are reported.

Who is in scope, and when

The regime is phased in by income. The first phase, live since 6 April 2026, covers landlords whose qualifying income exceeded £50,000 on their 2024–25 return. The threshold falls to £30,000 from April 2027 and to £20,000 from April 2028, which will eventually bring most landlords in.

Qualifying income is gross income from property and self-employment combined, before expenses. Employment income, pensions and dividends do not count. If you own a property jointly, only your share of the rent counts toward your threshold.

HMRC used the 2024–25 return to decide who joined in April 2026 and wrote to many affected landlords in early 2026, but the obligation does not depend on receiving a letter. If you meet the threshold you are in scope regardless. To check where you sit, the August rental income tax calculator gives an indicative qualifying income and start date.

The deadlines

Quarterly updates run to fixed dates regardless of when in the year you joined. Using the standard quarters aligned to the tax year:

• 6 April to 5 July, due 7 August

• 6 July to 5 October, due 7 November

• 6 October to 5 January, due 7 February

• 6 January to 5 April, due 7 May

After the fourth update comes the final declaration, which replaces the Self Assessment return, confirms all your income for the year including employment, interest and dividends, and is due by the unchanged 31 January deadline. The first final declaration, for 2026/27, is due by 31 January 2028. Note the sequencing in the first year: a landlord mandated from April 2026 still files a conventional Self Assessment return for 2025–26 by 31 January 2027.

How the quarterly cycle actually works

Five things about the mechanics catch landlords out.

Updates are cumulative. Each one restates the year to date from 6 April rather than covering only the preceding three months. A correction in one quarter carries forward into the next rather than needing a resubmission.

A quarter with no activity still needs a submission. A nil update is still an update.

No accounting adjustments are needed until the final declaration. Each quarterly update is a summary of income and expenses, not a return. Reliefs, allowances and adjustments are all handled at year end.

Updates can be prepared on the cash basis. There is no need to deal with accruals until the final declaration, which for most unincorporated landlords means the quarterly figures simply follow the bank account.

Landlords with property income below £90,000 can use a three-line summary, reporting total income and total expenses rather than itemising every category. That materially reduces the quarterly workload for most single-property and small-portfolio landlords.

If you have both rental and sole-trade income you submit separate updates for each, up to eight a year. Overseas property is reported separately again.

Digital records

You must record all rental income and allowable expenses digitally in compatible software, supported by receipts, invoices, bank data and a mileage log for property travel. Paper ledgers and standalone spreadsheets no longer satisfy the requirement on their own: a spreadsheet counts as a digital record, but it cannot file, so it needs bridging software connected by digital links. Copying figures across by hand breaks the digital link.

Records should be kept for at least five years after the 31 January deadline for the relevant tax year, and longer if HMRC opens an enquiry.

The allowable expenses themselves are unchanged. Our guide to rental property expense categorisation and the fuller list of allowable expenses for landlords both apply as before.

Software

You cannot file quarterly updates or the final declaration on the HMRC website or by post. HMRC's recognised options fall into three groups: full accounting packages such as Xero, QuickBooks and Sage; landlord-specific platforms such as August, Hammock and Landlord Studio; and bridging software that links an existing spreadsheet to HMRC.

August sits in the landlord-specific group and is recognised by HMRC as software that works with Making Tax Digital for Income Tax, listed on the GOV.UK software list for UK property income. You can see how August handles digital records, open banking connections and quarterly submissions on our Making Tax Digital software page, and our guide to the best MTD software for landlords compares the market including free tiers.

A dedicated landlord bank account also makes the digital trail cleaner, and our guide to the best bank accounts for landlords covers the choices.

Penalties

Late submission is handled by a points-based system. Each late quarterly update earns one point, and once you reach four points HMRC charges £200, with a further £200 for each later default until the points are cleared.

How points clear depends on where you stand. Below four points, each drops off automatically 24 months after the deadline it relates to. At or above four points, automatic expiry stops, and clearing them requires twelve consecutive months of on-time submissions plus every outstanding submission from the previous 24 months.

The 2026/27 easement means the first cohort will not collect points for late quarterly updates in that first year. It applies only to that cohort and only to quarterly updates, it does not touch the final declaration, and interest and percentage-based penalties still run on tax paid late. It will not be extended to those joining from April 2027.

Beyond the penalties, falling behind removes the real-time view of your tax position that the system is designed to provide, which is where unexpected bills come from.

Who is exempt

Making Tax Digital for Income Tax applies only to unincorporated landlords, so property held through a limited company is outside it: the company pays Corporation Tax and reports separately. HMRC confirmed in July 2025 that it will not introduce Making Tax Digital for Corporation Tax.

Partnerships are outside the current rollout, though individual partners may be caught on their own personal qualifying income. Ministers of religion and Lloyd's underwriters are not required to join during this Parliament. And anyone for whom digital tools are not reasonably practical, because of age, disability, location or religious belief, can apply for a digital exclusion exemption, which HMRC assesses case by case and does not grant automatically.

Signing up

You are not enrolled automatically, even if you already use Making Tax Digital for VAT or file Self Assessment online. You sign up through your Government Gateway account or via your accountant, using your Unique Taxpayer Reference and details of your income sources. If you are new to Self Assessment altogether, start with our guide to registering with HMRC as a landlord.

Working with an accountant

Making Tax Digital changes the rhythm of working with an accountant rather than removing the need for one. An accountant can hold compatible software and file quarterly updates on your behalf, but responsibility for accurate records stays with you.

Quarterly reporting means more frequent contact through the year instead of a single year-end meeting, which creates room for better planning but may also adjust fees to reflect the extra work. Agree now who submits each quarter, what information they need from you, and how often you will be in touch.

Making Tax Digital alongside your other obligations

Making Tax Digital does not stand alone. It is one strand of the landlord compliance picture, sitting beside annual gas safety checks, five-yearly electrical reports, EPC rules, Right to Rent checks, deposit protection and the requirements introduced by the Renters' Rights Act around tenancy terms, rent increases and written statements. The practical answer to all of it is the same: keep clean, current digital records and a single view of what is due when, rather than separate piles for tax, certificates and tenancy paperwork.

Where this leaves you

Making Tax Digital is no longer on the horizon. For landlords above £50,000 it is the live system, one quarter is already behind us, and the next update is due on 7 November.

The habit that makes it manageable is simple. Record income and expenses digitally as they happen, and the quarterly update becomes a review rather than a weekend. The landlords having the easiest time of it are not working harder than the ones who are behind, they are working with better records.

August is recognised by HMRC for Making Tax Digital for Income Tax and keeps the records, the categorisation and the quarterly submission in one place. Start free, or see what each plan includes on our pricing page.

This article is a guide and not legal, financial or tax advice. Tax rules change and circumstances vary, so always speak to a qualified accountant or tax adviser about your own position. Reviewed August 2026.