Making Tax Digital for Income Tax Self Assessment (often shortened to MTD for Income Tax or MTD ITSA) is the biggest shift in landlord tax compliance for years. For many landlords, the familiar annual Self Assessment routine will move to digital record-keeping, quarterly updates, and an end-of-year finalisation, all submitted via MTD-compatible software.

If you’re a landlord, whether you own one buy-to-let or a small portfolio, this is a change worth treating as a project, not a deadline.

When does MTD start for landlords?

MTD for Income Tax will apply to sole traders and landlords who are registered for Self Assessment and have qualifying income above the relevant threshold.

Current timetable:

• From 6 April 2026 – mandatory if qualifying income is over £50,000 (based on your 2024/25 tax return).

• From 6 April 2027 – mandatory if qualifying income is over £30,000 (based on your 2025/26 tax return).

• From 6 April 2028 (planned) – government plans to legislate to bring in those with qualifying income over £20,000 (based on 2026/27).

• Partnerships – HMRC says partnerships will be brought in in the future, but the timeline is not yet set.

What counts as “qualifying income” for landlords?

This is a key point and it catches people out.

HMRC looks at gross income (before expenses) from:

• property income, and

• self-employment income (if you have both, they’re combined).

Income from things like PAYE employment, dividends, pensions and partnerships doesn’t count towards qualifying income (though it still goes on your tax return as normal).

If you jointly own a property, it’s your share of the income that counts (and HMRC explains how they’ll assess this where figures are only known net of expenses).

What will landlords have to do under MTD?

1. Keep digital records
   You’ll need to keep your rental income and allowable expenses in a digital form, using compatible software. Those records then feed into your submissions.

2. Submit quarterly updates
   Every 3 months, your software creates totals for each income/expense category and sends a quarterly update to HMRC.
   Important practical points:

   1. 1. You do not need to make accounting or tax adjustments before sending a quarterly update.

      2. HMRC receive category totals, not your individual transactions.

      3. Even if you’ve had no activity, you still need to submit an update.

      4. After submitting, you’ll be able to see an estimated tax position in software/online services (useful, but not the final tax bill).

3. End-of-year finalisation and annual submission
   MTD doesn’t remove the annual tax return “moment” it changes how you get there. After your final quarterly update, you finalise the year and then submit your annual position through MTD software.
   
   HMRC also makes clear you’ll still need to submit your quarterly updates before you can submit the year-end return.

The deadlines landlords need to know

For most landlords, the “standard” quarterly periods align to the tax year, with deadlines one month after each quarter end:

• 6 April to 5 July → update due 7 August

• 6 April to 5 October → update due 7 November

• 6 April to 5 January → update due 7 February

• 6 April to 5 April → update due 7 May

So if you’re in the first wave from 6 April 2026, your first quarterly deadline is 7 August 2026.

Penalties and fines: what’s changed (and what’s coming)

Late submissions: points-based penalties

MTD uses a points-based late submission system:

• Each missed deadline earns a penalty point

• At a threshold, you get a £200 penalty

• After reaching the threshold, further late submissions can trigger further £200 penalties until you re-establish compliance and reset your points

For quarterly obligations (including MTD for Income Tax), the threshold is 4 points.

A “soft landing” for the first year (but don’t bank on it)

If you must join from 6 April 2026, HMRC state they won’t apply penalty points for late quarterly updates for the first 12 months, but penalty points can still apply for late year-end returns.

In plain English: there’s some breathing space, but it’s not a reason to leave things until summer 2026, because you still need a working process, software, and clean records to file the year properly.

Late payment penalties (and interest)

HMRC’s guidance on the new late payment penalty model for MTD for Income Tax participants shows a stepped approach (and interest still runs from day one of lateness).

From 2025/26 onwards, the structure HMRC describe is broadly:

• no penalty if paid within 15 days

• penalty if unpaid at day 15 and again if unpaid at day 30

• an additional charge accruing after day 30

(These rules are evolving as MTD rolls out, and the exact application can depend on the tax year and whether you’re within the new regime, which is another reason to get support early.)

Where the rules are heading next

Even if you’re not in the first wave, the direction of travel is clear:

• the threshold drops to £30,000 from April 2027,

• and there are plans to legislate for £20,000 from April 2028.

This means many landlords who “escape” in 2026 may still be brought in shortly after and it’s usually cheaper and calmer to prepare on your own timetable, rather than HMRC’s.

Why landlords should act now (even if you’re not mandated yet)

MTD isn’t just “four extra submissions”. It changes the workflow:

• your bookkeeping needs to be consistent and digital

• your record-keeping needs to be good enough, often enough

• and you need a process that can cope with the real world (late statements, repairs, voids, agent reports, mixed-use costs, joint ownership, and so on)

For many landlords, this is the perfect trigger for a professional “spring clean”:

• Are your records genuinely usable and complete?

• Are you claiming the right expenses (and only the right expenses)?

• Is your current advisor proactive, or just filing returns?

• Would better reporting help you make decisions on rents, refinancing, disposals, or portfolio structure?

How Smith Allen Chartered Accountants can help

We help landlords get ready for MTD in a way that’s practical, proportionate, and tailored to how you actually run your property finances.

Typical support includes:

• MTD readiness review (when you’re likely to be mandated, based on HMRC’s qualifying income rules)

• Process tidy-up (“spring clean” of bookkeeping categories, documents, and reporting habits)

• Software selection and setup (choosing the right tool for you, and making sure it’s configured correctly)

• Quarterly compliance support (keeping you on track with quarterly updates and avoiding deadline stress)

• Year-end finalisation and tax planning (so the annual position is correct, defendable, and optimised)

Whether you want to stay hands-on with your bookkeeping or prefer us to take the lead, we’ll build an approach that keeps you compliant and in control.

Next step: speak to us before the first reporting window opens

If you’re a landlord and want to get ahead of MTD whether you’re in the April 2026 wave or simply want to be ready for what’s coming, we’re happy to help.