Making Tax Digital for Income Tax went live on 6 April 2026, but only for the biggest landlords and sole traders first. If your rental income sits under the current threshold, you've been left out of round one. That doesn't mean you're out for good.
The thresholds step down over the next two years, and HMRC reviews your income every single year. So the real question isn't "am I in?" It's "when do I get pulled in, and will I see it coming?"
This guide is for UK landlords who are below the MTD threshold right now and want to know exactly when that changes. We'll walk through the three start dates, how HMRC works out who's caught, why a letter is nice to have but not something you can rely on, and a clear decision walkthrough so you can pin down your own date.
When does a landlord below the MTD threshold get caught?
If your qualifying income is below £50,000 you're out for now, but the threshold drops to £30,000 from 6 April 2027 and £20,000 from 6 April 2028, and HMRC checks your income every year. So you'll be caught the moment a past tax year's gross property and self-employment income crosses the threshold that applies to the next phase.
What are the MTD for Income Tax thresholds and start dates?
MTD for Income Tax is being rolled out in three phases. Each phase has its own qualifying income threshold, and the income that matters is from a specific earlier tax year, not the year you actually start.
Here's the timetable HMRC has set out.
| You must use MTD from | If your qualifying income was over | Based on this tax year's income |
|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 |
| 6 April 2027 | £30,000 | 2025/26 |
| 6 April 2028 | £20,000 | 2026/27 |
The key point for anyone below the line today: the threshold keeps falling. A landlord with gross rents of, say, £32,000 is comfortably outside the first phase, but they're already over the £30,000 line that bites from April 2027.
And the income that decides your fate for the April 2027 start is your 2025/26 income, the year that has just ended. So for a lot of landlords, the figure that pulls them in has, in effect, already been earned. You just haven't filed the return that reveals it yet.
There's no threshold below £20,000 announced as law. If your qualifying income stays at or under £20,000, you're not required to join MTD for Income Tax at all under the current rules.
What counts as "qualifying income" for the threshold?
This is where most landlords trip up, so it's worth being precise. Your qualifying income is measured in a particular way, and it's not the same as your taxable profit.
According to HMRC, qualifying income is your gross income before you take off any expenses. In its words, "HMRC will assess your gross income (income before you deduct expenses, also called your turnover)." So it's the rent that lands in your account, not what's left after the mortgage interest, letting agent fees and repairs.
It also aggregates. HMRC says "your qualifying income is the total income you get in a tax year from self-employment and property." So if you let property and also do a bit of sole-trader work on the side, the two add together against a single threshold. A landlord on £18,000 of rent who also turns over £6,000 freelancing has £24,000 of qualifying income, not two separate sums comfortably under £20,000.
For a UK resident, qualifying income includes both UK and overseas property income.
What does not count toward the threshold:
- Employment income taxed through PAYE
- A State Pension and private pensions
- Dividends, including from your own company
- Your share of partnership profit as an individual partner
So a landlord earning £45,000 in a day job and £15,000 in rent is below the threshold, because only the £15,000 of rent is qualifying income. The salary is reported later at the final declaration, but it doesn't drag you into MTD.
One more wrinkle that matters for record-keeping rather than the threshold: all your UK property is treated as a single property business, while UK and foreign property are separate businesses. That affects how you keep records once you're in, not whether you're caught.
If you want the bigger picture of how rental income is taxed and reported, our guide for landlords sets out the wider position.
How does HMRC decide if you're caught, and will you get a letter?
HMRC works this out from the return you've already filed. As the eligibility guidance puts it, "HMRC will review your Self Assessment tax return and check your qualifying income each tax year." It looks at the prior-year figures you've reported and measures them against the threshold for the next phase.
If you're over the line, HMRC writes to you. The guidance says, "If your income is above the relevant threshold HMRC will write to you, confirming that you need to start using Making Tax Digital for Income Tax."
Here's the part you can't afford to miss. The letter is a courtesy, not a trigger. The legal duty to check sits with you whether or not anything lands on the doormat. HMRC is explicit: "If you do not receive a letter, it is still your responsibility to check if and when you need to use Making Tax Digital for Income Tax, and make sure you are signed up and prepared to use it when you need to."
In practice, the mistake we see coming is people waiting for a letter that's based on an out-of-date return, or one that simply doesn't arrive because an address has changed. Because the income that decides the April 2027 start is your 2025/26 income, and you've got until 31 January 2027 to file that return, HMRC can't confirm your position until you've told them. The safe assumption is simple: if you can see your own gross figures crossing a threshold, plan as though you're in.
Because HMRC checks each tax year, this isn't a one-and-done. Someone below the threshold this year can be brought in a later year purely because rents went up or they added a property.
Illustrative example: when does a £28,000 landlord get pulled in?
Illustrative example. Priya is a landlord with two buy-to-let flats. She has no self-employment and earns a salary from an employer that's taxed under PAYE. Her gross rental income looks like this:
| Tax year | Gross rents (qualifying income) | Threshold in force for the next phase |
|---|---|---|
| 2024/25 | £27,000 | £50,000 (April 2026 phase) |
| 2025/26 | £28,500 | £30,000 (April 2027 phase) |
| 2026/27 | £31,200 | £20,000 (April 2028 phase) |
Priya's salary doesn't count, so only her rents are tested.
For the April 2026 phase, the test is her 2024/25 income of £27,000 against £50,000. She's well under, so she's not in round one.
For the April 2027 phase, the test is her 2025/26 income of £28,500 against £30,000. Still under, by £1,500. So she's not caught in April 2027 either, even though she's close.
For the April 2028 phase, the test is her 2026/27 income of £31,200 against £20,000. She's well over. So Priya must use MTD for Income Tax from 6 April 2028.
Notice what's happening. Priya's rents never spiked dramatically. The threshold came down to meet her. A £4,200 rise across three years was enough to move her from comfortably out to firmly in, simply because the bar dropped from £50,000 to £20,000.
The figure that seals it, her 2026/27 gross rent, is income she'll have earned by 5 April 2027, but she won't file the return revealing it until 31 January 2028, just over two months before she has to start. That's a tight window if she's not already keeping digital records. Planning ahead beats reacting to a letter.
A decision walkthrough: find your own MTD start date
Run your own numbers through this in order. It takes five minutes and it's more reliable than waiting for the post.
- Add up your gross income. Take your total rents (UK and foreign) plus any self-employment turnover, before any expenses, for the relevant tax year. Ignore salary, pensions and dividends.
- Check 2024/25 against £50,000. Over it? You should already be in MTD from 6 April 2026. Under it? Move on.
- Check 2025/26 against £30,000. Over it? You're in from 6 April 2027. Under it? Move on.
- Check 2026/27 against £20,000. Over it? You're in from 6 April 2028. Under it? You're not required to join under the current rules.
- Re-run this every year. Rents rise, you buy another property, you start a side business. Each new return resets the test, so a clear year now doesn't mean a clear year next time.
If any step puts you over, that's your start date. Diarise it, and aim to be keeping digital records well before 6 April of that year so your first quarterly update isn't a scramble.
Not sure which of your income counts, or whether a jointly owned property changes the maths? That's exactly the sort of thing our Self Assessment service is built to sort out before a deadline turns into a penalty.
What changes once you're in MTD for Income Tax?
Being "caught" isn't four tax returns a year, which is the fear we hear most often. It's a different rhythm. Here's the shape of it.
You keep digital records of your property income and expenses using compatible software. Manual copy-paste between programs isn't allowed once you're mandated; the data has to flow through digital links. If you use spreadsheets, you bridge them to HMRC with bridging software rather than retyping figures.
You send quarterly updates. These are not four mini tax returns. HMRC confirms "each time you send a quarterly update it will cover from the start of the tax year to the end of the update period, not just the previous three months." In other words, they're cumulative running totals that your software builds for you to check and send.
The standard deadlines are fixed.
| Quarter ends | Quarterly update due |
|---|---|
| 5 July | 7 August |
| 5 October | 7 November |
| 5 January | 7 February |
| 5 April | 7 May (in the following tax year) |
Then you make a final declaration by 31 January after the end of the tax year. This replaces the Self Assessment return you file now. It's where you bring in everything else, your salary, pension, dividends and savings, claim your reliefs and allowances, and confirm the year is correct and complete.
There's a points-based penalty system for late submissions. HMRC gives you a penalty point for each quarterly update or tax return deadline you miss, and once you reach 4 points you get a £200 penalty, with a further £200 each time you miss another deadline after that. Late payment penalties also apply on top, charged as a percentage of the tax owed and rising the longer it goes unpaid.
None of this is a reason to panic. It is a reason to get your bookkeeping onto a digital footing before you're mandated rather than after.
Who stays out, even above the threshold?
A handful of people don't have to use MTD for Income Tax even when their qualifying income is over a threshold.
You're automatically outside it if your qualifying income is £20,000 or less, if you don't have a National Insurance number before the start of the tax year, or if you're a personal representative of someone who has died, among other specific categories such as certain trusts and Lloyd's members.
You can also apply for an exemption if you're digitally excluded. HMRC allows this where it's not reasonable for you to use the software because of your age, a health condition or disability that stops you using a computer, tablet or smartphone; because your religious beliefs are incompatible with using digital communications; or because you can't get internet access at your home or business due to your location and can't get it at a suitable alternative location.
Exemption isn't automatic in those cases. You apply, and HMRC decides. So if you think one of these applies to you, start the conversation early rather than assuming you'll be waved through.
Frequently asked questions
I'm below £50,000 this year, so am I safe from MTD?
Only from the first phase. The threshold falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028, and HMRC checks your qualifying income every tax year. If your gross rents and any self-employment turnover rise above one of those lower thresholds in the relevant base year, you'll be brought in.
Does my salary or pension count toward the MTD threshold?
No. Qualifying income is gross income from self-employment and property only. Employment income taxed under PAYE, State and private pensions, and dividends do not count toward the threshold. You still report them, but at the final declaration rather than in the quarterly updates.
Will HMRC always send me a letter before I have to start?
HMRC says it will write to you if your reviewed Self Assessment income is over the threshold. But it also says that if you don't get a letter it's still your responsibility to check and sign up. Don't rely on the post, especially as the income that decides your start date is often a return you haven't filed yet.
Is my rent measured before or after expenses?
Before. HMRC assesses your gross income, also called your turnover, which is the rent you receive before deducting mortgage interest, agent fees, repairs or anything else. That means your qualifying income can be well above the threshold even if your taxable profit is modest.
Do my two rental properties count separately for the threshold?
No. All your UK property is treated as one property business, and its income is added to any foreign property income and any self-employment turnover to give a single qualifying income figure tested against one threshold.
What if my income drops below the threshold after I've joined?
You can choose to leave only after your qualifying income has been below the relevant threshold for 3 consecutive years, and even then you'd switch back to filing a Self Assessment tax return. HMRC also reminds you to keep checking, because a later rise can bring you back in.
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Key takeaways
- Being below the MTD threshold today is temporary for many landlords: the bar falls from £50,000 to £30,000 (April 2027) to £20,000 (April 2028).
- The income that decides each phase is an earlier tax year's gross figure, so the number that catches you may already be earned but not yet filed.
- Qualifying income is gross, aggregates property and self-employment, and excludes salary, pensions and dividends.
- HMRC writes to those it identifies, but checking is your legal responsibility with or without a letter.
- Run the decision walkthrough yearly, and get digital records in place before your start date, not after.
Want to know exactly which phase catches you, and get your records ready before the deadline? Book a free call with a Zmartly accountant and we'll map your MTD start date and set you up properly. Talk to us through our Self Assessment service.
