What is Making Tax Digital for Landlords?
Making tax digital for landlords effects the way in which landlords declare their rental and any other income to HMRC.
From April 2026 landlords with income above £50,000 will need to comply with MTD for ITSA rules. Landlords with income of above £30,000 will automatically qualify for MTD from April 2027.
ITSA stands for income tax for self assessment and it’s purpose is to change how accounting records are kept and how income is declared to HMRC.
Both rental and other business income qualifies for MTD income threshold purposes which means you need to combine all rental and business income to calculate your income for MTD for ITSA.
If you co own a property the MTD for ITSA income threshold applies per person and not per property.
What does making tax digital for landlords mean?
MTD for landlords requires digital accounting records to be kept and the reporting of income and expenses information more frequently.
The annual self assessment tax return is replaced by the following:
- Income and expenses figures reported quarterly.
- An end of period statement.
- A final declaration.
Landlord MTD digital record keeping
MTD for landlords means that your accounting records must be kept digitally using MTD compatible software.
The software used must be approved for use by HMRC for making tax digital to avoid ITSA penalties.
If you currently keep your accounting records electronically you need to ensure that the software is MTD for ITSA ready before submitting your quarterly reports, end of your statement and final declaration.
For example if you use an excel spreadsheet you will normally need to pay for bridging software which makes sure your excel accounting records are submitted to HMRC in the right format.
What do I need to submit to HMRC under MTD for ITSA?
You will need the same income and expenses information as before MTD for ITSA however it needs to be reported more frequently and in a different format.
The annual self assessment tax return is replaced by more regular online updates which give HMRC a more up to date record of your income and outgoings.
Landlords will be required to make quarterly submissions to report income and expenses on:
- 5th August
- 5th November
- 5th February
- 5th May
In addition a separate EOPS or end of period statement is mandatory for each source of business income.
To complete the online process a final declaration (which effectively replaces the SA100 annual tax return) is necessary before HMRC provides you with a final tax calculation for the year.
Which landlords does MTD for ITSA apply to?
All landlords with an income of £50,000 or more are required to comply from April 2026 including non resident landlords based outside the UK.
Any landlords with an income of more than £30,000 start ITSA submissions from April 2027 with the staged approach for MTD meaning landlords with income below £30,000 having a start date at an undefined date (as of April 2023) in the future.
How do I submit my landlord tax return through ITSA?
HMRC need to receive your MTD for ITSA submissions via third party software. You can find software that’s compatible with MTD for income tax and a bit about what each provider offers on .GOV.
It’s a good idea to do some research on MTD for ITSA software providers to find the best fit for your rental business.
It is possible to sign up for MTD for ITSA as a landlord before the ITSA introduction dates of April 2026 and April 2027.
HMRC can only sign up some volunteers to the MTD for ITSA platform due to system restrictions.
Before you apply you must ensure you have compatible software solutions in place and meet the other MTD volunteer criteria.
MTD for Landlords Accountants
Accountants have been well versed in making tax digital for ITSA with HMRC requirements at the forefront of their accountancy packages.
It’s worth considering using an accountant for any landlords that don’t already use one to help with the transition to MTD.
The right accountant can provide MTD record keeping software and file all quarterly reports, end of period statement and the final declaration on time to HMRC.
