Making Tax Digital (MTD) is a government initiative designed to modernise and digitise the UK tax system. From 6 April 2026, landlords will move away from annual paper-based tax returns to a fully digital process.
This change aims to improve accuracy and efficiency, but it will require landlords to adapt to new reporting requirements.
What is Making Tax Digital (MTD)?
MTD is part of HMRC’s long-term plan to simplify tax administration. Under the new rules, landlords with a qualifying income will need to submit quarterly tax updates using HMRC-approved software. This means no more paper-based returns – everything will be digital.
Key dates and income thresholds
- 6 April 2026: MTD becomes mandatory for landlords with qualifying income
- Thresholds:
Note that Thresholds are based on gross income (before expenses) from rental properties and self-employment.- 2026–27 tax year: £50,000
- From April 2027: £30,000
- From April 2028: £20,000.
What does Making Tax Digital (MTD) mean for landlords?
If your combined rental and self-employed income exceed the threshold, you must:
- Keep digital records of property income and allowable expenses using MTD-compatible software (e.g., Hammock, FreeAgent, Xero, QuickBooks)
- Submit quarterly updates to HMRC via approved software on 7 August 2026, 7 November 2026, 7 February 2026 and 7 May 2026
- Make a final declaration at tax year-end
- Sign up for MTD before the relevant start date. There is no automatic registration with HMRC.
How landlords can prepare for Making Tax Digital (MTD)
- Check your qualifying income: Review rental and self-employed income to see if you meet the threshold for April 2026 and subsequent years
- Choose HMRC-recognised software: Spreadsheets alone won’t comply unless paired with bridging software
- Digitise your records: Ensure income and expenses are stored digitally and can be transmitted via software
- Plan ahead: If you have an accountant, speak to them about how they’ll support your transition
- Be aware: A points-based penalty system will penalise landlords that don’t comply.
How Cluttons can help landlords
We’ll support our clients through the MTD transition, including providing quarterly statements ahead of time.
FOR MORE INFORMATION
Contact Chris Morris, head of London lettings.
Considering the future of your portfolio?
In light of these new requirements and upcoming changes to letting under the Renters’ Rights Act, landlords may be considering the future of their property portfolio. To support landlord’s in making informed decisions, we’re offering complimentary, no-obligation joint sales & rental market appraisals. The appraisal will provide you with:
- Balanced, objective advice on your property assets
- An overview of local housing market dynamics
- Our forecasts for rental and sales markets
Christopher Morris
Partner – Head of London lettings
Head office
T +44 (0) 20 7354 6666 Email Christopher
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The information provided in this report is the sole property of Cluttons LLP and provides basic information and not legal advice. It must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Cluttons LLP. The information contained in this report has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. Cluttons LLP does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.
