How Landlords Will Be Affected by MTD for Income Tax

Team Nomi

Sep 11, 2025
3 minutes read

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Calling all landlords. If you earn income from letting out property, big changes are coming your way. From 6 April 2026, HMRC will introduce MTD for landlords. This is a new requirement for many property owners to keep digital records and submit quarterly updates instead of the traditional annual Self Assessment.

This change in reporting is part of HMRC’s wider Making Tax Digital (MTD) programme. The goal is to reduce errors, improve accuracy and modernise the UK tax system. But how exactly will it affect you as a landlord? Let’s explain.

Who Will Be Affected by MTD for Landlords?

The new rules will apply if you:

• Earn more than £50,000 in qualifying income (gross) from self-employment and property combined  from 6 April 2026.
  
• Earn more than £30,000 in qualifying income (gross) from 6 April 2027.
  

If you fall under these thresholds, you can continue using the existing Self Assessment system for now. But be aware that HMRC has signalled plans to expand MTD further in the future (though this has yet to be legislated).

What Will Change for Landlords?

Currently, most landlords file one tax return a year under the Self Assessment system. Under MTD for rental income, you will:

1. Keep digital records of all property income and expenses.
   
2. Submit quarterly updates to HMRC using recognised software.
   
3. File an End of Period Statement (EOPS) after the tax year.
   
4. Complete a Final Declaration to confirm all income sources and tax due.
   

Instead of stressing with an end-of-year rush, you’ll be updating HMRC every three months.

Why HMRC Is Making the Change

HMRC estimates the UK tax gap to be £35 billion, often due to late or inaccurate reporting. By introducing MTD for landlords, they aim to:

• Reduce the kind of mistakes that arise from manual record-keeping.
• Give taxpayers a more accurate and up-to-date picture of their liabilities in real-time.
  
• Encourage better cash flow management by spreading admin throughout the year.

How to Prepare for MTD for Property Income

1. Switch to MTD-Compatible Software

You’ll need HMRC-recognised software. This needs to be capable of recording property transactions, calculating quarterly figures and submitting updates directly to HMRC.

2. Digitise Your Records

Paper files won’t be enough on their own. You’ll be required to move to a fully digital system for rent receipts, invoices and expense records.

3. Adjust to Quarterly Reporting

Make bookkeeping a regular habit, monthly if possible, so your quarterly updates are quick, accurate and as easy as possible.

4. Work with Your Accountant

If you use an accountant, speak to them now about their plan for managing MTD for rental income.

The Benefits of MTD for Landlords

While the change may feel like extra work in the short term, digital record-keeping can actually save time. It also gives you better insight into your property finances. Benefits include:

• Real-time tax estimates to help budget for payments.
  
• Less chance of HMRC penalties for errors.
  
• Streamlined communication with accountants.

Preparing for MTD for Landlords: Your Next Steps

MTD for landlords marks a major change in how property owners manage tax reporting. By preparing early, choosing the right tools and getting into the habit of digital record-keeping, you can make the transition smooth and simple.

Want to make MTD compliance simple? Nomi’s MTD-ready software for landlords helps track rent, record expenses and file quarterly updates directly to HMRC. An easy way to save valuable time and reduce unnecessary stress.

Book your free demo today.