Making Tax Digital for Income Tax stopped being a future problem on 6 April 2026. More than 860,000 sole traders and landlords crossed into mandation that day, the first quarterly update is due by 7 August 2026, and the question your landlords will ask between now and then is simple: "can you give me my numbers in a form my software accepts?"
This guide covers the rules as they stand, verified against gov.uk and the underlying regulations on 11 July 2026, and then what they mean operationally for agencies. It is general information, not tax advice.
Who is mandated, and when
The schedule is now fixed in law (the Income Tax (Digital Obligations) Regulations 2026, SI 2026/336):
- From 6 April 2026: landlords and sole traders whose qualifying income exceeded £50,000 in 2024-25. This is live now.
- From 6 April 2027: over £30,000 in 2025-26.
- From 6 April 2028: over £20,000 in 2026-27.
- £20,000 or less: automatically exempt, and no extension below that line has been announced.
Two details that decide borderline cases. Qualifying income is gross, before any expenses, and it combines self-employment turnover with property income: £25,000 of rent plus £27,000 of trade turnover mandates a landlord even though neither alone would. And for jointly owned property, only the owner's share counts; where an owner is only ever notified of their post-expenses share, HMRC assesses that figure.
Also worth knowing: partnerships are currently out of scope entirely, sign-up is not automatic even after HMRC writes to a landlord (someone must actively sign up, and an agent can do it), and a brand-new landlord is not mandated until after their first Self Assessment return.
What mandated landlords must actually do
Three obligations, none of which is a new tax:
- Digital records. Every transaction recorded with its amount, its date and its category, in MTD-compatible software, before the relevant quarterly deadline. Spreadsheets are fine if bridging software connects them to HMRC, and links between products must be digital. Two easements matter for landlords: jointly let property reported income-only can be recorded as one entry per income category per quarter, and landlords under the VAT threshold may use simplified categories, except that residential finance costs always need their own record.
- Quarterly updates. Cumulative category totals, sent by 7 August, 7 November, 7 February and 7 May. No adjustments, no receipts: gov.uk is explicit that HMRC does not receive individual transactions. Nil updates are still mandatory, and corrections simply flow through the next cumulative update.
- The annual tax return. One per year, still due 31 January, but for MTD users it must be completed and submitted through MTD-compatible software rather than HMRC's own online return. Year-end adjustments happen there. Payment dates and amounts do not change.
Exemptions and penalties
Automatic exemptions cover income at or under £20,000, trusts and estates, non-resident companies and several narrower categories; foster carers and some others are deferred to April 2027. Digital exclusion is a real but narrow application route (age, disability, religious grounds or no internet access at your location); HMRC has said it rejects applications based only on preferring paper, disliking software, low transaction volume or cost.
Penalties are points-based: one point per missed submission deadline, a £200 fine at four points and per miss thereafter. The first-year easement is precise and often misquoted: quarterly-update points are waived for 2026-27 only, all updates must still be filed before the return, and late-return and late-payment penalties apply as normal, with late payment charged at 3% at day 15 and day 30 plus 10% a year from day 31 in 2026-27.
What this means for letting agents
Here is the sentence that matters most, verified against the digital record-keeping notice: there is no letting-agent easement. An agency's PDF statement, however beautiful, is not itself a digital record. The landlord's data must exist, transaction by transaction, in compatible software.
That reshapes the agency's role in three concrete ways:
- Your statement data becomes their source data. Mandated landlords need transaction-level exports: date, amount, category, per property, covering rent received, your fees, repairs, and finance costs kept separable, aligned to quarters ending 5 July, 5 October, 5 January and 5 April (or calendar quarters where the landlord elects them), in time for the 7th-of-the-following-month deadlines. An agency that can hand over a clean per-landlord CSV every quarter has just become measurably more valuable; one that cannot has become a compliance risk its landlords will route around.
- You can formally do it for them. HMRC's agent model allows one main agent (typically the accountant, who files the return) plus any number of supporting agents, who can sign a client up and file the quarterly property updates. A letting agency can occupy that supporting-agent slot. For jointly-let, income-only landlords, quarterly statement totals genuinely suffice; for everyone else, transaction-level it is.
- The questions are predictable, so answer them once. Every mandated landlord will eventually ask: am I over the threshold (gross, combined, share-of-joint)? What do you need from me? What do I get from you, and when? A one-page answer sheet per agency, sent proactively, converts a compliance headache into a retention argument.
The myths, corrected
The misinformation around MTD is remarkably consistent, so here is the short version to keep to hand: it is not quarterly tax payment; it is not four tax returns; HMRC does not see individual receipts; the threshold is gross income, not profit; joint owners count only their share; spreadsheets are not banned; HMRC does not sign anyone up automatically; year one waives only quarterly-update points, not return or payment penalties; agent statements alone are not digital records; and mandated users cannot file on HMRC's free online return.
Where LintelCRM fits
LintelCRM is not MTD filing software, and this guide would lose all credibility pretending otherwise. What it does is sit one step upstream, where the agency's obligations live: every rent receipt, fee and repair is a ledger transaction with a date, amount and category; landlord statements are generated from that ledger rather than assembled by hand; and the landlord portal delivers them without an email. When a landlord's bookkeeper asks for the quarter, the data exists, categorised, at transaction level, which is exactly the shape MTD wants it in.
Sources
Gov.uk: "Find out if and when you need to use Making Tax Digital for Income Tax", "Work out your qualifying income", the "Use Making Tax Digital for Income Tax" hub (digital records, quarterly updates, tax return), the digital record-keeping notice, exemptions and penalties pages, and the agent-model guidance; SI 2026/336; HMRC's 5 February 2026 press release. All checked 11 July 2026. Not tax advice; specific cases belong with a qualified adviser.