Making Tax Digital for Landlords: A Complete Guide to Preparing for HMRC Changes
- Culverhouse & Co
- Jun 22
- 3 min read
What is Making Tax Digital for landlords? Making Tax Digital is a government initiative designed to modernise the UK tax system.
Instead of keeping records manually and submitting one tax return each year, landlords will need to:
Keep digital records of property income and expenses
Use HMRC-approved software
Submit quarterly updates to HMRC
Complete a final declaration at the end of the tax year
The aim is to create a more accurate and efficient tax system while helping taxpayers understand their tax position throughout the year.
When does Making Tax Digital start for landlords?
MTD for Income Tax is being introduced gradually. The current rollout is:
April 2026
Landlords and self-employed individuals with qualifying income above £50,000 must comply. So you should've started on 6 April 2026.
April 2027
The rules extend to those with qualifying income above £30,000.
April 2028
The threshold reduces to £20,000.
Qualifying income is based on gross income before expenses, not your profit. If you receive rental income alongside self-employed income, both may count towards the threshold.
What landlords need to do for Making Tax Digital
1. Keep digital records
Landlords will need digital records showing:
Rental income received
Property expenses
Repairs and maintenance costs
Letting agent fees
Other allowable costs
Paper records alone will no longer be sufficient for landlords who fall within MTD requirements.
2. Use compatible software
MTD requires landlords to submit information using HMRC-compatible software.
The right software can help you:
Record transactions accurately
Store receipts digitally
Monitor income and expenses
Prepare quarterly submissions
Choosing software that fits your circumstances is important, especially if you manage multiple properties or have complex income.
3. Submit quarterly updates
Rather than waiting until the end of the year, landlords will need to send regular updates to HMRC.
These updates provide summaries of income and expenses during the quarter. Quarterly reporting gives landlords greater visibility over their tax position and allows issues to be identified earlier.
4. Complete a final declaration
At the end of the tax year, landlords will still need to confirm their final position. This allows adjustments, reliefs, and other taxable income to be included.
Benefits of Making Tax Digital for landlords
Although MTD introduces new responsibilities, it can also provide advantages.
Better visibility of your tax position
Digital records allow landlords to understand their income, expenses, and potential tax liabilities throughout the year.
Easier financial planning
Knowing where you stand earlier makes it easier to budget for tax payments and make informed property decisions.
Reduced risk of errors
Digital systems reduce the reliance on manual calculations and help prevent missing important information.
How to prepare for Making Tax Digital
Preparing early will make the transition much easier.
A practical checklist:
Check whether MTD applies to you
Review your total property and self-employed income to understand when you need to comply.
Move your records online
If you still rely on spreadsheets, paper files, or manual records, start transitioning now.
Choose suitable software
Look for software that:
Meets HMRC requirements
Works with your accounting processes
Gives you access to accurate financial information
Review your current systems
Consider whether your current bookkeeping process will work under quarterly reporting.
A Chartered accountant can help you understand your obligations and make sure your systems are ready.
How we help landlords prepare for Making Tax Digital
Making Tax Digital is about having the right processes in place. Our team helps landlords and businesses transition smoothly by providing:
Support setting up digital accounting systems and templates
Guidance migrating existing financial records
Advice on Making Tax Digital compliance
Help choosing HMRC-approved software
Our Chartered experts have extensive experience helping clients prepare for MTD and understand that changes like this can initially feel complicated.
As David Knight, Director at Culverhouse & Co, explains:
"As with any change, companies find it a little daunting at first, but the benefits are soon apparent and include: being able to view your tax situation and liabilities in real time, the ability to plan and budget more efficiently as well as saving time and hassle as all your company’s information is available at the touch of a button”.
Get ready for Making Tax Digital
The earlier you prepare, the easier the transition will be.
Whether you need help selecting software, organising your records, or understanding your responsibilities, our team can guide you through the process.
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