Making Tax Digital for Income Tax (MTD IT) is no longer a distant policy. It is a diary entry. If you are a landlord or you manage properties for landlords, the record-keeping habits that were merely untidy last year become non-compliant on a fixed schedule.
Tax rules change and individual circumstances differ, so confirm your position with your accountant.
The deadlines that matter
- From April 2026: landlords and sole traders with combined qualifying income (gross rents plus self-employment turnover, before expenses) over £50,000 must comply.
- From April 2027: the threshold drops to over £30,000.
- A further extension to £20,000 has been signalled for later years. The direction of travel is clear: eventually, this is everyone.
Note the definition: it is gross income, not profit. A landlord with five modest properties clears £50,000 of rent long before they see £50,000 of profit.
What MTD actually requires
Three obligations, none optional:
- Digital records. Every rental income and expense transaction recorded in software (or a spreadsheet linked through bridging software). Paper ledgers and retyped totals no longer qualify. The digital link from record to filing must be unbroken.
- Quarterly updates. Four submissions a year to HMRC per income source, summarising income and expenses. These are cumulative summaries, not tax calculations, but they must come from your digital records.
- Final declaration. A year-end submission replacing the Self Assessment return, where reliefs and adjustments are made.
Miss the rhythm and a points-based penalty system starts counting.
What "good" looks like for a landlord
The landlords who find MTD painless share one habit: transactions are captured once, at source, against the property. Rent lands and is recorded against the tenancy automatically; the contractor invoice is filed against the job that generated it; the statement to the landlord reconciles to the same ledger the tax figures come from.
The landlords who find it painful share the opposite habit: a year of bank statements meets a spreadsheet every January.
Preparation checklist (one afternoon)
- Work out your qualifying income for the current year: gross rents across all properties plus any sole-trader turnover. Over £50k? Your start date is April 2026.
- Pick where your digital records will live. Whatever you choose, the test is: can every rent receipt and expense be traced, digitally, from source to submission?
- Separate your property finances. A dedicated bank account per portfolio makes digital capture dramatically cleaner.
- Digitise expense capture now. Photograph invoices at point of receipt and attach them to the property or job. Retro-fitting a year of receipts is the January nightmare MTD was designed to kill.
- Talk to your accountant about software compatibility. They will file through the same records, so choose tools they can work with.
For letting agents: this is a retention opportunity
Your landlords are about to feel a new administrative burden. Agents who can hand each landlord a clean, exportable ledger, with every rent, fee and repair itemised against their properties, become measurably more valuable exactly when landlords are deciding whether self-managing is still worth it.
LintelCRM's finance module keeps that ledger as a by-product of normal management, and the landlord portal delivers statements landlords (and their accountants) can actually use.
Frequently asked questions
I own properties jointly: whose income counts? Your share counts towards your own qualifying income. A 50/50 joint portfolio grossing £80,000 puts each owner at £40,000: under the 2026 threshold, over the 2027 one.
Are limited-company landlords included? No. MTD IT covers Income Tax. Company landlords file Corporation Tax, with its own digitalisation timetable.
Do I still file quarterly if I make a loss? Yes. Quarterly updates report income and expenses regardless of profitability.