The way landlords report rental income is changing... and yes, it’s a big one.
Here’s what landlords need to know, minus the jargon.
When does MTD apply to you?
MTD is being rolled out in stages, based on your qualifying income (that’s your gross income before expenses) from property and self-employment.
Key dates:
- From 6 April 2026 – if your qualifying income is over £50,000 (based on the 2024–25 tax year)
- From 6 April 2027 – if your qualifying income is over £30,000
- From 6 April 2028 – planned extension to those earning over £20,000
HMRC will usually write to you if you’re affected, but the responsibility still sits with you to check and register on time, whether or not you've heard from HMRC.
What counts as “qualifying income”?
This is where people often get caught out.
The threshold is based on turnover, not profit. For landlords, that includes:
- UK and overseas rental income (personally owned - not via a limited company)
- Any self-employed income
If you own a property jointly, only your share counts.
So if a property earns £60,000 and you own 50%, your qualifying income is £30,000.
Income from PAYE jobs, pensions, dividends and savings interest doesn’t count towards the threshold, although it still needs to be included in your end-of-year declaration.
The three things MTD requires
Once you’re in, MTD comes with three ongoing obligations, all done through HMRC-compatible software:
- Digital records
Every income and expense needs to be recorded digitally. - Quarterly updates
You’ll submit summaries to HMRC every quarter, within one month of the quarter ending. - Final Declaration
Due by 31 January each year, this replaces the traditional Self Assessment return and pulls everything together, including other income.
The “digital journey” (and why your agent matters)
HMRC is very clear on one thing: no manual copying or re-keying of data.
This “digital journey” means your records must flow cleanly from source to submission. If you use a letting agent, they need to be able to provide transaction-level digital data and receipts that plug straight into your accounting software.
Agents still relying on spreadsheets or clunky legacy systems could create real bottlenecks (and potential compliance headaches) for their landlords.
Choosing the right software
HMRC won’t give you software, you’ll need to choose your own. There are two main routes:
Full accounting software
Tools like Xero, QuickBooks, Sage or FreeAgent (free for some NatWest/Mettle customers) handle bank feeds, expenses and submissions.
There are also landlord-specific platforms such as Hammock, Landlord Studio and Landlord Vision, built with property income in mind.
Bridging software
If you prefer spreadsheets, bridging software (like EasyBooks or Gbooks) can sit between your records and HMRC, as long as everything is digitally linked.
What happens if you don’t comply?
HMRC is introducing a points-based penalty system for late submissions.
Good news: during the first year of MTD (2026–27), penalty points won’t apply to late quarterly updates.
Less good news: penalties will still apply for late Final Declarations and late tax payments.
What landlords should do now
A bit of prep now will save a lot of stress later:
- Check your 2024–25 income to see if you’ll be in the first wave from April 2026
- Separate your finances with a dedicated rental bank account - it makes digital record-keeping far easier
- Speak to your accountant or software provider early to make sure you’re MTD-ready
As your letting agency, we’re committed to providing the clean, transaction-level digital data you’ll need to stay compliant under MTD. If you want to talk through what this means for you (or sense-check your setup), just shout.
For our frequently asked questions on the topic, visit our dedicated page to MTD.
