Tue 15 Sep 2026

Making Tax Digital for Landlords: What You Need to Know Now

If you rent out a property and earn a good amount from it, you may already need to be using a system called Making Tax Digital, or MTD for short. It became compulsory on 6 April 2026 for sole traders and landlords whose income from self-employment and property added up to more than £50,000 in the 2024 to 2025 tax year.

More than 570,000 people have already joined the service, according to figures published by HMRC. If you fall into this group but have not signed up yet, or have not sent your first update, it is worth sorting out now, before HMRC gets in touch with you.

What is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax is a new way for sole traders and landlords to report their income and expenses to HMRC. Instead of filling in one big tax return at the end of the year, you keep digital records and send HMRC a quarterly update throughout the year, followed by a final declaration.

If you use a letting agent to manage your property, they can help with parts of this process and talk you through what the changes mean for you. It still helps to understand the basics yourself, since the responsibility for getting it right sits with you as the landlord.

Who needs to sign up, and when?

The rules are being brought in gradually, based on how much you earn from renting property and self-employment combined. This is called your qualifying income, and it is worked out before you take off any expenses.

Tax year rules start	Qualifying income threshold
From 6 April 2026	More than £50,000
From 6 April 2027	More than £30,000
From 6 April 2028	More than £20,000

So even if you are under the threshold today, you may need to sign up in a year or two as the limit comes down. It is worth keeping an eye on your rental income each year to check where you stand.

HMRC has started signing people up automatically

From September 2026, HMRC will begin signing up anyone it believes should already be using Making Tax Digital for Income Tax. This is being done in stages over several months, using information from 2024 to 2025 Self Assessment tax returns. HMRC will get in touch with each person once they have been added, either through HMRC's online services or by post, depending on their circumstances.

You do not have to wait to be contacted

If you think you should be using the service, you do not need to sit and wait for a letter. You, or a tax professional acting for you, can sign up directly through GOV.UK. Doing this yourself means you can check HMRC holds the correct details for you and update anything that has changed since your last tax return.

If you are not sure whether HMRC has already added you, you can check through HMRC's online services. A message will appear once you have signed in if you have already been added to the service.

What if I have not signed up or sent an update yet?

The good news is that HMRC has said it will not hand out penalty points for missing a quarterly update during the 2026 to 2027 tax year. This gives everyone some breathing space while they get used to the new system.

That said, this is not a reason to put things off. You still need to keep digital records and send HMRC the information it asks for, and penalty points will start to apply from the 2027 to 2028 tax year onwards. Getting your records in order now, rather than scrambling to catch up later, will save you a lot of stress.

Where to find out more

HMRC's guidance covers most situations, but if you want a clear, independent explanation written for landlords specifically, the Low Incomes Tax Reform Group has a helpful page on Making Tax Digital for landlords. It walks through how to work out your qualifying income, what counts as an expense, and how things work if you own a property jointly with someone else.

Frequently asked questions

1) Do I need to sign up for Making Tax Digital if I use a letting agent?

Yes. Your letting agent can help with parts of the process, such as recording rent and expenses, but the responsibility for signing up and reporting to HMRC stays with you as the landlord.

2) What counts as qualifying income?

Qualifying income is your total income from self-employment and property, added together, before you take off any expenses. This is the figure HMRC uses to decide whether you need to sign up.

3) Will I be fined if I miss a deadline this year?

You will not receive penalty points for missing a quarterly update deadline during the 2026 to 2027 tax year. However, you must still keep digital records and submit the information HMRC asks for, and penalties will apply from later tax years.

4) How do I know if HMRC has already signed me up?

Sign in to HMRC's online services and check for a message confirming you have been added. If you are unsure, it is best to check rather than assume either way.

How we can help

Making Tax Digital is one more thing to keep on top of alongside everything else that comes with renting out a property. If you are thinking about becoming a landlord in Benfleet, Hockley or the wider South Essex area, our guide to becoming a landlord is a good place to start. If you already let a property and would like a hand with the day-to-day side of things, our property management team can take a lot of that off your plate.

We are not tax advisers, so for anything specific to your own finances, it is best to speak to an accountant or tax professional. But if you have questions about renting out a property in South Essex more generally, our team is always happy to help.