Making Tax Digital (MTD) is not simply an administrative update. For landlords, it represents part of a broader shift in how property income is monitored, recorded, and reported across the UK tax system.
From April 2026, higher-earning landlords will be the first to move into this new reporting framework. Over time, the policy direction is clear: digital compliance and more frequent income reporting will become the standard expectation for a growing proportion of the private rented sector.
For landlords thinking long term, particularly those with multiple properties or expanding portfolios, understanding MTD now is an important step in future-proofing rental operations.
A policy shift towards year-round reporting
MTD for Income Tax changes the rhythm of Self Assessment.
Rather than treating tax reporting as an annual event, HMRC is moving towards a system where rental income and expenses are recorded digitally and shared throughout the year using compatible software.
This does not change how tax is calculated. However, it does change the way landlords engage with reporting obligations, placing greater emphasis on consistent record management, regular updates during the year, and end-of-year confirmation through software.
In policy terms, MTD aligns with HMRC’s wider focus on reducing reporting errors and improving transparency across income streams.
April 2026 is the first threshold, but not the final one
The initial rollout begins on 6 April 2026, applying to landlords whose qualifying income from property and/or self-employment exceeds £50,000 per year.
HMRC has confirmed that the threshold will reduce over the following years. From April 2027, the system will apply to those with an income over £30,000. From April 2028, the threshold is expected to reduce further to £20,000, subject to legislation.
This staged approach signals that MTD will gradually become relevant to a much wider segment of landlords, not only those currently above the first threshold.
What counts as qualifying income?
The threshold is based on gross qualifying income, before expenses are deducted.
For landlords, this includes total rental income and, where applicable, any self-employment income. This is particularly important for landlords with mixed income sources, as multiple streams may push qualifying income above the relevant threshold sooner than expected.
MTD for Income Tax applies to individuals within Self Assessment. Different reporting arrangements apply to properties held through limited companies.
Once landlords understand whether they fall within scope, the next question is how the reporting process will work in practice.
What changes operationally for landlords?
For investors, the key question is not simply what MTD is, but what it will require in practice.
Landlords will need to maintain rental income and allowable expense records digitally, rather than relying solely on paper files or end-of-year summaries. This includes rent received, maintenance costs, agent fees, and other deductible expenses.
Landlords within scope will also provide HMRC with regular summary updates during the tax year using compatible software. These updates are not tax demands, but they do create a more continuous reporting cycle across the year.
After the tax year ends, a final submission will still be required to confirm overall figures, and standard Self Assessment payment deadlines will continue to apply.
Software, advisers, and the professionalisation of reporting
HMRC will not provide its own software platform for landlords.
Instead, compliance will depend on commercial MTD-compatible software, either used directly by landlords or managed through accountants and advisers.
For many landlords, this may accelerate a broader shift towards more professional financial systems, with digital reporting becoming part of standard operational practice rather than an annual task.
Strategic preparation for property investors
While April 2026 is the first milestone, landlords can take practical steps now to support long-term readiness.
It may be helpful to review income levels against future thresholds, assess whether current record-keeping is managed electronically, speak with tax advisers about reporting requirements, and ensure rental documentation is consistent and up to date.
For investors, early preparation is not only about compliance but also about reducing friction as reporting becomes more frequent.
Long-term confidence in a changing compliance landscape
Making Tax Digital is one of several reforms shaping the future of landlord obligations. As reporting becomes more structured, landlords who adopt clear systems early will be better positioned to manage change smoothly.
Northwood supports landlords with professional property management, reliable rental documentation, and long-term guidance to help investors stay organised as tax and regulatory requirements evolve.
For landlords taking a long-term approach, early adaptation will help ensure compliance remains straightforward as the system continues to develop.
If you would like advice ahead of April 2026, speak to your local Northwood branch.
