Does Making Tax Digital apply to landlords?

Making Tax Digital for Income Tax became mandatory in April 2026, and the first quarterly deadline, 7 August 2026, is the moment many landlords found out it applies to them. Here is who is in, what HMRC actually wants, and where a managed landlord sits.

Who is in scope now?

Anyone whose gross qualifying income was over £50,000 a year is in from April 2026. Two details catch landlords out. The test is gross income before expenses, so the figure is your rent, not your profit. And it is property plus self-employment combined, so a trade turning over £40,000 with £12,000 of rent alongside is in scope even though neither alone would be.

In practical terms, around six properties at the Kirklees average rent, or four at the Leeds average, clears £50,000. A five-room HMO at £500 a room is £30,000 of gross income on its own. Our guide to what a rental property costs a landlord covers the expense side.

From	Gross income threshold
April 2026	£50,000
April 2027	£30,000
April 2028	£20,000

By April 2028 most landlords with more than one property will be in. Whether the 2027 drop catches you, and what your next tax return has to do with it, is worked through in will Making Tax Digital apply to you in 2027.

What do you actually have to do?

Three things, none of them a tax return in themselves.

1. Keep digital records of rental income and expenses in HMRC-recognised software.
2. Send a quarterly update, a cumulative summary generated by that software, by 7 August, 7 November, 7 February and 7 May. The full calendar, year-end dates included, is in when are the Making Tax Digital deadlines.
3. Finish the year with the usual final declaration and payment by 31 January, exactly as before.

The tax you pay does not change. What changes is that the records must live in software rather than a folder of receipts, and HMRC hears from you four times a year instead of once. Exemptions exist for the digitally excluded, and joint owners can defer expense detail to year end; the share rules are in how Making Tax Digital works for jointly owned property. Choosing the software itself is covered in what software landlords need.

What are the penalties?

For 2026-27 HMRC has said it will not issue penalty points for late quarterly updates while people adjust, though late payment penalties still run. From year two, each missed deadline is a point and four points is a £200 fixed penalty. With four deadlines a year, a landlord who never quite gets round to it reaches the penalty within twelve months. If you have already missed one, what happens after a missed update covers the catch-up.

Rules change, and thresholds or easements can move. We confirm the current position on gov.uk, and your accountant should confirm yours before you rely on any single point here.

Where a letting agent fits

MTD is a bookkeeping problem more than a tax problem, and the landlords finding it easy are the ones whose numbers already arrive organised. A fully managed landlord gets an itemised statement every month: rent received, management fee, maintenance at contractor cost. That is the digital record MTD software wants, available from the owner portal whenever your accountant needs it.

We wrote up the first deadline in more detail in our July 2026 article on the 7 August filing. What we manage is in what a property manager actually does, and the full compliance picture is in the landlord compliance checklist. If the quarterly rhythm is the thing that finally makes self-managing feel like a second job, tell us about the property and we will give you a straight answer on what management would cost against the time it buys back.