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Making Tax Digital: What Landlords Need to Know

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 With just six months to go before many landlords must adopt Making Tax Digital (MTD), confusion still reigns. Few landlords are ready, and HMRC hasn't yet clarified all the details. So what does this mean for you—and what should you do now?

What Is Making Tax Digital?

MTD is HMRC's initiative to digitise tax reporting. Instead of submitting a single annual tax return, landlords will need to send quarterly updates of income and expenses using approved software. HMRC hopes this will improve accuracy and efficiency, but for landlords, it means a significant change in how property finances are managed. 

Who Will Be Affected—and When?

 MTD will be rolled out in stages based on your qualifying income:

Qualifying income is your total gross rental income (before expenses) from UK and overseas property. If you're also self-employed, you must add your gross turnover from that business. Other income sources—like employment, pensions, or dividends—don't count.

Start Date Threshold

 Who Must Join Qualifying Income
April 2026 Sole traders & landlords Over £50,000
April 2027Sole traders & landlordsOver £30,000
April 2028Sole traders & landlordsOver £20,000

Six Steps to MTD Readiness

  1. Limited Company Landlords: If all your properties are held in a company, MTD doesn't apply. Relax and read no further.
  2. Check Your Income: Look at your 2024–2025 tax return and find your total gross rental income. If it exceeds the relevant threshold, you'll need to comply with MTD from the applicable date.
  3. Understand Your Options:
    • Accountants: Will they handle quarterly submissions? Can you afford the increased cost?
    • Software Packages: If you use Sage, Xero, or a landlord-specific tool, check whether they'll be HMRC-compliant.
    • Spreadsheets: You'll need bridging software to submit data. Are your records updated quarterly?
  4. Couples Beware: If you co-own property, your income split affects your start date. A 50:50 split may delay MTD, but unequal splits could mean one partner starts earlier than the other.
  5. Plan for Change: Think about your current processes. Will they work under MTD? What needs to change?
  6. Act Early: Don't wait until the deadline. Start exploring software, talking to your accountant, and preparing your records now.

Join Us in November

We'll be covering all of this—and more—at our November meeting. Whether you're spreadsheet-savvy or software-shy, we'll help you understand your options and prepare for the transition. 

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About the author

Martin Silman

Martin began his landlord journey 30 years ago, while working in an international role for a global telecommunications company. Since retiring he has extended his portfolio, which he manages with his wife, but has always focussed on the ‘small student HMO’ sector preferring to offer homes in the community for small groups to the more common ‘pack them in and take the money’ mentality. He has chaired the PDPLA for the past 12 years and has overseen the Associations transition from small local self-help group to a much larger and more professional institution which is recognised and listened to nationally. Alongside his PDPLA role, he also has leadership roles in a number of other local organisations – bringing his unique perspective, driving for change and increased use of technology while respecting the history that brought us here.

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