UK landlords with rental income over £50,000 must comply with Making Tax Digital for Income Tax (MTD ITSA) from 6 April 2026 — keeping digital records and submitting quarterly updates plus a year-end finalisation. The threshold drops to £30,000 from April 2027.
This is a significant change for landlords currently filing standard Self Assessment once a year. The transition needs preparation, not last-minute scramble.
Who is in scope
Landlords with gross rental income over the threshold for the relevant tax year:
| From | Threshold | Trigger year |
|---|---|---|
| 6 April 2026 | £50,000 | Looking at 2024/25 income |
| 6 April 2027 | £30,000 | Looking at 2025/26 income |
| Future (TBC) | Lower threshold | TBA |
"Gross rental income" means total rent received before deducting expenses — including from UK property and overseas property. If you have £35,000 from UK rental plus £20,000 from self-employment, total qualifying income is £55,000 — you''re in from April 2026.
If you only have rental income, the trigger is rental income alone. If you have multiple sources of qualifying income (self-employment AND rental), they''re combined for the threshold test.
What MTD requires of landlords
From the relevant April:
- Keep digital records of every rental property transaction (rent received, expenses paid) in MTD-compatible software.
- Submit quarterly updates to HMRC showing income and expenses for the period.
- Submit a year-end finalisation by 31 January following the tax year end.
Quarterly deadlines (standard tax year periods):
| Period | Due |
|---|---|
| 6 April – 5 July | 7 August |
| 6 July – 5 October | 7 November |
| 6 October – 5 January | 7 February |
| 6 January – 5 April | 7 May |
Each update reports income, allowable expenses, and computed net rental income — by property where applicable.
Different rules for jointly-owned property
Joint ownership rules:
- Each joint owner has their own MTD obligation if their share of the rental income meets the threshold.
- The property-level totals can be reported once and then apportioned, or each owner can maintain their own records of their share.
- Typically the software handles this well — most cloud accounting tools support multiple ownership splits.
For a couple with one property in joint names and total rent of £80,000, each receives £40,000 of qualifying income — both are in scope of MTD from April 2027 (when the threshold drops to £30,000), not April 2026.
Furnished Holiday Lets — different treatment
The Furnished Holiday Let (FHL) regime was abolished from 6 April 2025. Properties that previously qualified as FHL are now treated like standard residential rentals for tax purposes — losing Capital Allowances, Mortgage Interest Relief (full), and BADR eligibility.
For MTD, FHL income is now combined with other rental income when applying the threshold. Pre-2025 FHL accounting workflows need updating.
Software requirements
You must use HMRC-recognised MTD-compatible software. Options for landlords:
Property-specialist tools
- Landlord Vision: built specifically for UK landlords. Good multi-property and lettings management features.
- Hammock: simple, landlord-focused, well-priced for small portfolios.
- Arthur Online: focused on managing agents and larger portfolios.
General cloud accounting
- Xero, QuickBooks, FreeAgent: all support landlord schedules. May need add-on configuration.
Spreadsheets with bridging
- Excel/Google Sheets plus a bridging app (AbsoluteExcel, BTCSoftware). Cheaper but requires discipline.
Pen-and-paper and direct HMRC-portal filing are no longer permitted in scope.
What''s allowed as a deductible expense
Common deductible rental expenses:
- Letting agent fees and management fees.
- Insurance (landlord, building, contents).
- Maintenance and repairs (not improvements — those are capital).
- Council tax and utility bills paid by the landlord.
- Mortgage interest (subject to the basic-rate-tax-credit cap since 2017 for individual landlords).
- Accountancy fees.
- Travel costs to and from the property (subject to wholly and exclusively rule).
Capital improvements (extensions, new kitchens, new bathrooms beyond like-for-like) are NOT allowable against rental income — but go into the property''s base cost for CGT when sold.
The mortgage interest restriction
For individual landlords (not limited-company landlords), full deduction of mortgage interest from rental income is no longer allowed.
Instead, you receive a 20% basic-rate tax credit on the interest. Practical effect:
- Higher-rate taxpayers pay more tax on rental income than under the old regime.
- The credit is applied after computing the tax bill — meaning interest doesn''t reduce the rental income figure itself.
- Limited-company landlords don''t face this restriction — companies still get full Corporation Tax deduction for mortgage interest.
Many higher-rate landlords have incorporated their portfolios to escape the restriction. Incorporation has its own tax friction (SDLT on transfer, CGT on transfer) — get specific advice before doing this.
How to prepare in the next 12 months
1. Check your qualifying income
Look at your 2024/25 gross rental income. If it''s over £50,000, you''re in scope from April 2026.
2. Pick MTD-compatible software
Sign up to a property-specialist tool or cloud accounting platform. Start using it for the current tax year (2025/26) so you have a year of practice before the obligations kick in.
3. Onboard each property
For each property: set up a digital record, capture historical transactions for the current year, configure ownership splits if applicable, set up bank feeds.
4. Set up bank feeds
Open Banking feeds from any account used for rental activity. Categorise transactions consistently.
5. Diary the quarterly deadlines
Add the four quarterly dates to your calendar with a 2-week-before reminder.
6. Talk to your accountant
If you use an accountant, agree the MTD workflow and fee structure before April 2026. Many are charging more for MTD-handled clients (it''s more work) — set expectations upfront.
What to do this month
- Check your 2024/25 rental income against the £50,000 threshold.
- If in scope, pick MTD software and onboard your first property this month.
- Start digital record-keeping in parallel for the current tax year.
- Diary 6 April 2026 and the first quarterly deadline (7 August 2026).