Making Tax Digital for landlords: what changes from April 2026

One-line answer. From 6 April 2026, UK landlords with combined self-employment + property income above £50,000 must keep digital records and submit quarterly updates to HMRC through recognised software. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028. By 2028, around 1.7 million landlords are in scope. If you’re affected, a spreadsheet on its own is no longer enough.

This page covers who’s in scope and when, exactly what you have to submit, what counts as recognised software, the penalty regime, and what to do today if you don’t currently keep digital records.

When MTD ITSA starts (and for whom)

From Threshold (combined SE + property income) Estimated landlords in scope
6 April 2026 over £50,000 ~700,000
6 April 2027 over £30,000 ~1.0M cumulative
6 April 2028 over £20,000 ~1.7M cumulative

The threshold is on gross income (rents received plus self-employment turnover), not profit. A landlord receiving £55,000 gross rent on a single property is in scope from April 2026 even if their net profit after mortgage interest is much smaller.

Below £20,000 of combined income, MTD ITSA does not apply. You continue to file an annual SA105 the way you always have.

What you have to submit

Under MTD ITSA you submit:

  1. Quarterly updates — every three months, send HMRC a digital summary of each property’s income and expenses. Four submissions per tax year, due:
    • 7 August (quarter 1: 6 Apr – 5 Jul)
    • 7 November (quarter 2: 6 Jul – 5 Oct)
    • 7 February (quarter 3: 6 Oct – 5 Jan)
    • 7 May (quarter 4: 6 Jan – 5 Apr)
  2. End-of-period statement for each business (so one for the property business, one for self-employment if applicable). This is where you finalise expenses and claim reliefs.
  3. Final declaration — replaces the annual Self Assessment return. Confirms your total income for the year and triggers the tax bill.

The quarterly updates are summary totals by category (rents, repairs, finance costs, etc.). You don’t submit every transaction. But you must hold the underlying digital records.

What counts as a “digital record”

HMRC’s definition: every transaction must be recorded digitally with date, amount, and category, and the chain from raw transaction to submitted figure must be unbroken (the “digital link” rule).

A spreadsheet is a digital record — but typing figures from a paper bank statement into a spreadsheet breaks the digital link at the data-entry step. You either need:

You can keep using spreadsheets if you connect them to bridging software that submits the totals to HMRC’s API. That’s an extra cost and an extra moving part. Most landlords find a single integrated tool cheaper.

Recognised software

HMRC publishes a list of software products compatible with MTD for Income Tax. At the time of writing it includes:

A full comparison of these tools is in our landlord accounting software guide.

LetLedger is on the recognised-software roadmap for 2026. Today it covers the SA105 annual workflow; quarterly submission is the next milestone.

What it costs

Plan for £6 to £21 per month of software cost, plus your time. The cheapest serious options:

Spreadsheets + bridging software typically come in around £100–£200/year all-in, more once you account for the time cost of manual entry.

Penalties

MTD ITSA introduces a points-based late-filing system. Each late quarterly submission earns one point. Hit four points (one full year of misses) and you receive an automatic £200 penalty. Subsequent misses each cost another £200 until you submit four returns on time in a row to reset.

Late payment penalties remain separate:

Interest accrues from the original due date at HMRC’s prescribed rate (currently 7.75%).

What to do now (2025/26 readiness checklist)

If you’re in scope from April 2026:

  1. Open a dedicated bank account for the property business if you haven’t. Mixing rents with personal spending is allowed but doubles the bookkeeping work.
  2. Pick MTD-recognised software before the 2025/26 tax year ends (5 April 2026) so your first quarterly submission has clean records to draw from.
  3. Onboard your accountant — they’ll need access to the same software, or a clean export.
  4. Run a dry-run in Q4 2025/26 — do the categorisation, run the totals, see what your quarterly figures would look like. Better to find the gaps in March 2026 than August 2026.
  5. Decide on cash basis vs accruals — cash basis is simpler for most landlords with combined property income under £150,000. Once chosen, stick with it for at least a year.

If you’re below the threshold but think you’ll cross it within two years (rents rising, second job income, side hustle expansion), do the same prep now. Crossing mid-year doesn’t trigger MTD until the next tax year, but the readiness work takes weeks not days.

What MTD ITSA does NOT change

So everything in our rental income tax calculator still applies. The maths is the same; only the filing rhythm changes.

How LetLedger handles MTD

LetLedger today: upload your bank statement, AI categorises every transaction to the correct SA105 box, year-end PDF summary you can hand to your accountant or use to file SA105.

LetLedger 2026 roadmap:

If you sign up for the 2026 beta, MTD submission will be included at no extra cost when it ships.

Join the LetLedger 2026 beta →

FAQ

Am I in MTD ITSA from April 2026? Only if your combined gross self-employment + property income exceeds £50,000 in the 2024/25 tax year. HMRC checks the prior year’s figure to decide who’s in scope.

What if I’m just a landlord with no self-employment? Same rule — your gross rents alone need to exceed £50,000 (April 2026) / £30,000 (April 2027) / £20,000 (April 2028) for that single tax year’s income to put you in scope.

Do I have to submit transactions or just totals? Quarterly updates are summary totals only. You hold the underlying digital records and HMRC may ask to see them.

Can I keep using a spreadsheet? Yes, but only if connected to bridging software. The data-entry step from paper statement into spreadsheet breaks the “digital link” rule. CSV imports are fine.

What happens if I miss a quarterly deadline? Late submission earns a point in the new points-based system. Four points = £200 penalty. Late payment is separate and adds 2% at 16 days, more after.

Will my accountant submit for me? Yes — most accountants are signing up to MTD-agent services. You’ll keep digital records in software they can access; they’ll review and submit on your behalf.

Does MTD ITSA apply to limited-company landlords? No — companies file CT600 corporation tax returns, which are already digital. MTD ITSA applies to individual landlords filing income tax.

Are jointly-owned properties counted once or twice? Each owner’s share counts towards their individual threshold. Two joint owners of a £60k-rent property are each at £30k — neither is in scope from April 2026, but both are from April 2027.

Is rental income from abroad included? Foreign property income goes on a different supplementary page (SA106) but counts towards the MTD ITSA threshold.

What about the rent-a-room scheme? Income within the £7,500 rent-a-room allowance doesn’t count towards the threshold. Above it, the excess does.

This article is editorial guidance, not tax advice. HMRC rules and software roadmaps change. Verify dates and software status against gov.uk before relying on any of this for filing decisions.