If you let property and file a Self Assessment return, the way you report your rental income is about to change. From 6 April 2026, the first group of landlords has to follow Making Tax Digital for Income Tax Self Assessment, usually shortened to MTD for ITSA.
In plain terms, that means keeping your records digitally and sending HMRC updates four times a year instead of one return at the end. It's the biggest shake-up to landlord tax reporting in years, and the rules phase in based on how much you earn.
This guide is for individual landlords who want a clear, no-jargon answer to three questions: am I in, when, and what do I actually have to do? We'll walk through the thresholds, the deadlines, a worked example, and the practical steps to get ready.
What is MTD for ITSA?
Making Tax Digital for Income Tax is HMRC's new way of collecting income tax information from sole traders and landlords. It replaces the once-a-year Self Assessment process with a digital, in-year approach.
There are two core changes. First, you have to keep digital records of your property income and expenses using MTD-compatible software. A spreadsheet on its own won't cut it unless it connects to software through bridging tools. Second, you send HMRC a quarterly update from that software, then finish the year with a final declaration that replaces your usual tax return.
It builds on MTD for VAT, which has been mandatory for all VAT-registered businesses since 1 April 2022 (see HMRC's MTD for VAT collection). MTD for ITSA brings the same digital approach to property and self-employment income.
Who has to use MTD for landlords, and when?
MTD for ITSA applies if you're a sole trader or landlord registered for Self Assessment, you receive property income (or self-employment income, or both), and your qualifying income is over the threshold for that phase.
It rolls out in three phases, each tied to a lower income threshold. The threshold is tested against a specific past tax year, so HMRC can tell you in advance.
| Phase start | Qualifying income over | Income tested for tax year |
|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 |
| 6 April 2027 | £30,000 | 2025/26 |
| 6 April 2028 | £20,000 | 2026/27 |
Source: Check when to sign up for Making Tax Digital for Income Tax.
So a landlord with qualifying income above £50,000 in their 2024/25 return is in the first wave from 6 April 2026. If your income is between £30,000 and £50,000, you're in from April 2027. Between £20,000 and £30,000, you join from April 2028.
HMRC reviews your Self Assessment return each year and writes to you if you're caught. That said, you stay responsible for checking your own position even if no letter arrives.
What counts as qualifying income?
This is the part landlords most often get wrong, so it's worth being precise.
Qualifying income is the total gross income you get in a tax year from self-employment and property combined. Gross means before you deduct any expenses. It's your turnover, not your profit.
For property, that's the rent before you take off mortgage interest, letting agent fees, repairs or anything else. If you also run a sole trader business, you add the two gross figures together to test the threshold.
A few points that catch people out, based on HMRC's qualifying income guidance:
- Joint property counts as your share of the gross rent, not the whole property's income.
- Employment and PAYE income, dividends, and pensions do not count towards qualifying income.
- Partnership profit shares as an individual partner are excluded for now.
So a landlord earning a £45,000 salary plus £28,000 of gross rent has qualifying income of £28,000, not £73,000. The salary is ignored for the threshold test.
What do you actually have to do under MTD?
Three things, in order.
1. Keep digital records. Every item of rental income and every allowable expense has to be recorded digitally in compatible software, at or near the time it happens. Shoeboxes of receipts and a once-a-year catch-up won't meet the rules.
2. Send quarterly updates. Four times a year you submit a summary of your property income and expenses straight from the software. Each update is cumulative: it covers from the start of the tax year up to the end of that quarter, not just the latest three months. These figures are running totals and don't need to be perfect to the penny, because you fix them at year-end.
3. Submit a final declaration. After the fourth quarter, you make any adjustments (think reliefs, the residential finance cost restriction, and any other income), confirm everything is correct, and submit your final declaration. This replaces the Self Assessment tax return you file today. The payment dates for your tax don't change.
If you let property jointly, each owner reports their own share through their own MTD records.
When are the quarterly update deadlines?
Under the standard quarters, which align to the tax year, the deadlines are fixed. The update period runs from 6 April, and each deadline falls one month and seven days after a quarter end.
| Quarter | Period covered (cumulative) | Submission deadline |
|---|---|---|
| Q1 | 6 April to 5 July | 7 August |
| Q2 | 6 April to 5 October | 7 November |
| Q3 | 6 April to 5 January | 7 February |
| Q4 | 6 April to 5 April | 7 May |
Source: Use Making Tax Digital for Income Tax: send quarterly updates.
There's a handy option if your records run to the end of the month. You can elect to use calendar update periods instead (1 April to 30 June, and so on), which lines up neatly if you total your rent by calendar month. You have to choose this in your software before your first update for the year.
Your final declaration deadline stays at 31 January following the tax year, the same date as the current online Self Assessment deadline (see HMRC's Self Assessment deadlines).
Illustrative example: a landlord's first MTD year
Illustrative example. Priya is a higher-rate taxpayer who lets two flats. In her 2024/25 Self Assessment return, her gross rental income was £54,000. Because that's over £50,000, HMRC writes to confirm she must use MTD for ITSA from 6 April 2026. She has no self-employment, and her PAYE salary doesn't count towards the threshold.
For the 2026/27 tax year, here's her rhythm under standard quarters:
| Date | What Priya does |
|---|---|
| 7 August 2026 | Sends Q1 update (rent and expenses, 6 April to 5 July) |
| 7 November 2026 | Sends Q2 update (cumulative to 5 October) |
| 7 February 2027 | Sends Q3 update (cumulative to 5 January) |
| 7 May 2027 | Sends Q4 update (cumulative to 5 April) |
| By 31 January 2028 | Submits final declaration and pays any tax due |
Now the figures. Suppose her gross rent for 2026/27 is £54,000 and her allowable running costs (letting fees, repairs, insurance, ground rent) come to £9,000. Her mortgage interest is £12,000, which for residential lets is not a deductible expense but instead gets a 20% tax credit.
Her taxable property profit is £54,000 - £9,000 = £45,000.
As a higher-rate taxpayer, the property profit is taxed at 40% (the higher rate for 2025/26 and 2026/27, per gov.uk income tax rates): £45,000 x 40% = £18,000.
She then gets the finance cost relief of 20% of her £12,000 mortgage interest: £12,000 x 20% = £2,400.
Her income tax on the property comes to £18,000 - £2,400 = £15,600 for 2026/27.
The key point: MTD changes how often Priya reports, not how her tax is calculated. The four updates are running summaries; the real maths still happens at the final declaration.
Who is exempt from MTD for ITSA?
Some landlords won't have to use MTD, even if their income is over the threshold. HMRC's exemptions include people who are digitally excluded, for example because of age, disability, location with no reliable internet, or religious grounds. Some exemptions are automatic and others need an application to HMRC.
You also don't start using MTD until after you've filed your first Self Assessment return, so brand-new landlords get their first year on the old system before joining.
If you think you might qualify for an exemption, don't just assume it. Check the current rules on gov.uk or ask an accountant to confirm your position before the deadline.
How should landlords get ready?
You don't need to panic, but the landlords who start early will have a far smoother first year. Here's a sensible order of play.
- Work out your phase. Find your gross property income on your latest return and check it against the thresholds above. Don't forget to add any sole trader turnover.
- Choose MTD-compatible software now. Picking it early lets you get used to recording income and expenses digitally before it's compulsory.
- Tidy up your bookkeeping. Separate bank account for rent, consistent expense categories, and receipts captured as you go. Good bookkeeping is the foundation that makes quarterly updates painless.
- Decide standard or calendar quarters. If you already total rent by calendar month, the calendar option may suit you better.
- Get advice if you have a complex picture. Multiple properties, joint ownership, furnished holiday lets or mixed income can all change what you report and when.
Done well, MTD is mostly an admin change. Done at the last minute, it's a scramble. The earlier you build the habit of digital record keeping, the less the deadlines will bother you.
If you'd like a hand getting set up, our accountants for landlords can review your position, recommend the right software and run your records and reporting end to end.
Frequently asked questions
When does MTD for landlords start?
The first phase starts on 6 April 2026 for landlords whose qualifying income (gross property and self-employment income combined) was over £50,000 in the 2024/25 tax year. A £30,000 threshold follows from 6 April 2027 and a £20,000 threshold from 6 April 2028.
Does MTD apply to all landlords?
No. It applies to landlords registered for Self Assessment whose qualifying income is above the relevant threshold. Landlords below £20,000 of qualifying income are not currently in scope, and some people qualify for an exemption, for example if they're digitally excluded.
Is qualifying income before or after expenses?
It's before expenses. Qualifying income is your gross income, meaning the total rent and any self-employment turnover before you deduct mortgage interest, agent fees, repairs or other costs.
How many tax updates will I send under MTD?
Five submissions a year in total: four quarterly updates and one final declaration. The quarterly updates are cumulative summaries, and the final declaration replaces your current Self Assessment return.
Do my tax payment dates change under MTD?
No. MTD changes how and how often you report, not when you pay. Your balancing payment is still due by 31 January following the tax year, with payments on account on 31 January and 31 July where they apply.
Do I still need MTD-compatible software if I use a spreadsheet?
Yes. You can keep using a spreadsheet, but it has to connect to HMRC through MTD-compatible bridging software so the data is submitted digitally. A standalone spreadsheet on its own does not meet the rules.
Book a free Tax Health Check →
Want help getting MTD-ready?
MTD for ITSA is manageable with the right setup, and far easier when someone handles the software and the deadlines for you. Book a free 20-minute call with a Zmartly accountant and we'll check your phase, get your records MTD-ready and take quarterly reporting off your plate. Explore our self assessment services or get in touch.
