Making Tax Digital for Income Tax is no longer a plan. It started on 6 April 2026 for the highest earners, and the second quarterly update is due this Saturday, 7 November. If your rental income is above £50,000 you are already in it. If it is above £30,000 you are in from April 2027, and above £20,000 from April 2028. This edition explains who is caught, what you actually have to do, and how to work out where you stand, because the date you join depends on a figure many landlords have never calculated.
The Dates and Thresholds
The rules phase in by income, using the amount you earned in an earlier tax year:
You join from | If your qualifying income was over | In tax year |
|---|---|---|
6 April 2026 | £50,000 | 2024 to 2025 |
6 April 2027 | £30,000 | 2025 to 2026 |
6 April 2028 | £20,000 | 2026 to 2027 |
Partnerships will be dealt with later. If you were already above £50,000 in 2024 to 2025, GOV.UK says you should have started on 6 April 2026, and you can still sign up if you haven’t.
What Counts as “Qualifying Income”
This is where people get caught out. Qualifying income combines your self-employment and property income, and the NRLA’s guide says it is measured on the gross figure, before expenses. It does not include PAYE earnings, pensions or dividends, and it does not include capital gains from selling a property.
A few practical points from that guide:
Joint ownership: income is usually split by ownership share. Married couples and civil partners default to 50/50 unless a Form 17 declaration says otherwise. A property earning £100,000 split 25/75 puts the 75% owner in from 2026 and the 25% owner in from 2028.
Deposits: generally not income unless you keep some of it, for example for rent arrears or damage.
Limited companies: not covered. They stay under corporation tax.
First-time landlords: MTD does not apply until after you have filed your first Self Assessment return for the rental income.
HMRC is writing to people it thinks are caught, but GOV.UK is clear that you remain responsible for checking even if no letter arrives.
What You Actually Have to Do
Once you are in, there are three jobs:
Keep digital records in compatible software. Each record needs the amount, the date and the category. Records must be kept for five years.
Send quarterly updates, a summary of income and expenses every three months for each property business.
Make a final declaration for the whole tax year through your software, then pay the tax. It replaces the traditional Self Assessment return.
HMRC does not provide software. You need a compatible product, or bridging software if you prefer to keep a spreadsheet.
The Quarterly Deadlines
For the 2026 to 2027 tax year the quarterly update dates are:
7 August 2026 (done)
7 November 2026 (this Saturday)
7 February 2027
7 May 2027
Each update is cumulative, covering the tax year from 6 April to the end of that quarter. The tax return and payment for 2026 to 2027 are due by 31 January 2028. If you are in MTD for the first time this year, you also still file a traditional return for the previous tax year.
Penalties
HMRC has moved to a points-based system for late submissions. The key detail from GOV.UK is that you will not get a penalty straight away, and no penalty points apply to late quarterly updates for the 2026 to 2027 tax year, though you still need to send them before submitting your return. A commercial guide states that four points trigger a £200 penalty, but that is not on the GOV.UK pages I could read, so treat it as unconfirmed. Late payment penalties and interest work separately and do apply.
Simplified Accounts and Exemptions
Three-line accounts are available if your turnover is below the VAT registration threshold. Entries are tagged as income or expense, except residential mortgage interest and other finance costs, which are reported separately.
Cash basis is the default and is available up to £300,000 turnover.
Exemptions apply for digital exclusion, such as age, disability or location where digital records are impractical, and for certain other groups. These are decided case by case by HMRC, and exempt people still report income through Self Assessment.
What to Do This Week
Work out your qualifying income for 2024 to 2025, 2025 to 2026 and 2026 to 2027. Use gross rents for each property and split joint ownership correctly.
If you are already in: check that your 7 November update is ready. Confirm your software is connected and that the figures from April to September are complete.
If you are in from April 2027: choose software this winter and start keeping digital records before April, not after.
If you are in from April 2028: you have time, but start by separating income and costs by property.
Tell your accountant which stage you fall into and ask if they will file the quarterly updates for you.
Keep receipts and invoices in one place, labelled by property and by date.
Bottom Line
MTD turns a once-a-year tax job into a four-times-a-year routine. For most landlords the paperwork isn’t harder, it just has to be done earlier and in software. The real risk is not knowing which year you fall into. Check your gross rental income for each of the next three tax years, put the dates in your diary, and if you are already in, get Saturday’s update sent.
Know a landlord who thinks MTD only affects big portfolios? Forward this on.
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Next edition: Tuesday 10 November, with another essential compliance update for UK landlords.
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