Making tax digital for landlords: what it means for you and how to get ready

If you are a landlord, it probably feels like there is always something new to keep up with.

One minute it is maintenance, tenant queries or rising costs. The next, it is another tax or compliance change that needs your attention. So if you have started hearing more about Making Tax Digital for landlords and are wondering whether this is going to mean more paperwork, more admin and more stress, you are certainly not alone!

A lot of landlords are in the same position.

The good news is that while Making Tax Digital is an important change, it does not need to become a last-minute headache. With the right support and a bit of preparation, it can be managed much more smoothly than many people expect.

In this guide, we will explain what Making Tax Digital for landlords actually means, who it is likely to affect, what changes are coming up, and what practical steps you can take now to feel more in control.

What is Making Tax Digital for landlords?

Making Tax Digital, often shortened to MTD, is HMRC’s move towards a more digital tax system.

For landlords, this means that if your income falls within the relevant threshold, you may need to keep digital records, use compatible software and send regular updates to HMRC rather than dealing with everything in one go through your annual Self Assessment process.

In simple terms, landlords affected by Making Tax Digital will need to:

• keep digital records of rental income and expenses
• use software that links with HMRC
• submit quarterly updates
• complete a year-end finalisation

For landlords who are used to sorting receipts, checking statements and pulling figures together once a year, that can sound like a big change. And in fairness, it is.

But it is also the sort of change that becomes much less daunting once you know what is expected and have a clear system in place.

Does Making Tax Digital apply to landlords?

Yes, it can.

If you are a landlord who reports rental income through Self Assessment, Making Tax Digital for Income Tax may apply to you over the next few years.

The rules are being introduced in stages:

• from April 2026, for landlords and sole traders with qualifying income over £50,000
• from April 2027, for those with qualifying income over £30,000
• from April 2028, for those with qualifying income over £20,000

That is an important point, because many landlords assume this is only something that will affect larger investors or people with very big portfolios.

In reality, plenty of smaller landlords may end up falling within the rules too, especially as the threshold comes down.

What counts towards the threshold?

This is one of the areas that often causes confusion.

The threshold is based on qualifying income, not profit. So it is the gross income coming in that matters, before expenses are deducted.

For landlords, that can include:

• UK property income
• overseas property income
• self-employed income, if you also work for yourself

So even if your actual profit feels modest after costs, the amount of rent coming in could still mean Making Tax Digital applies to you.

That is one reason why some landlords are caught off guard by it.

Why this feels like a worry for many landlords

Concern around Making Tax Digital is understandable. For many landlords, tax is already one of the more difficult parts of managing a property. It is not always the figures themselves that cause stress. More often, it is the worry of missing something, misunderstanding the rules or falling behind without realising it.

That can be even more frustrating if you are already managing:

• repairs and maintenance
• tenant communication
• rent collection
• rising costs
• changing legal responsibilities

When you add another reporting requirement into the mix, it is easy to feel as though being a landlord is becoming more admin-heavy every year.

That is especially true for accidental landlords, part-time landlords and anyone managing property around a full-time job or family life.

What landlords will need to do under Making Tax Digital

Once MTD applies to you, there are a few key changes to be aware of.

Keep digital records

Landlords will need to keep digital records of rental income and allowable expenses.

That may include things such as:

• rent received
• letting agent fees
• repairs and maintenance
• landlord insurance
• utility bills paid by the landlord
• legal or professional fees
• other allowable day-to-day costs

If your records are currently spread across emails, paper files, bank statements and the odd spreadsheet, this is where things can start to feel a bit overwhelming.

The best approach is usually to simplify things gradually rather than trying to overhaul everything at once.

Use compatible software

Once Making Tax Digital applies, paper records alone will not be enough.

You will need to use software that works with HMRC’s system. That can sound technical, but for many landlords it simply means moving to a more organised digital way of recording income and expenses.

For some, that will be straightforward. For others, especially if your records have built up over time in different places, it may take a bit more support to get everything working properly.

Submit quarterly updates

This is often the part landlords are least keen on.

Rather than waiting until the end of the tax year to deal with everything, affected landlords will need to submit quarterly updates to HMRC.

That does not mean working out your final tax bill every three months, but it does mean keeping your records more up to date during the year.

For busy landlords, that is often the biggest adjustment.

Complete year-end finalisation

There will still be a final year-end step to confirm your tax position.

So the annual tax process does not disappear altogether, but it does become part of a more regular reporting routine.

Recent and upcoming UK tax changes landlords should be aware of

Making Tax Digital is one of the main changes landlords are looking at, but it is not the only tax development to have affected property income recently.

The tax year basis reform has already happened

One significant recent change has been the move to a tax year basis for unincorporated businesses and property income.

For landlords whose accounting date did not already line up with the tax year, that may already have had an impact on how income has been reported.

It is another reminder that landlord tax reporting is moving towards a more structured system, which makes accurate record keeping more important than ever.

Making Tax Digital starts from April 2026

For many landlords, this will be the next major deadline to prepare for.

If your qualifying income is above £50,000, the new rules are due to start from April 2026. The threshold then reduces in April 2027 and again in April 2028, bringing more landlords within scope over time.

That means the next two to three years are not a reason to put this off. They are really your window to get organised before it becomes urgent.

What this means for accidental landlords

Accidental landlords often find changes like this the hardest to navigate.

If you are renting out a former home, a property you inherited or a house that you did not originally buy as an investment, you may not have systems in place that feel particularly formal.

That is very common.

You may have managed perfectly well up to now with a folder of documents, a few saved emails and a rough idea of what you spent during the year. But Making Tax Digital is likely to require a more consistent approach.

If you are asking yourself things like:

• do I need software now?
• what records should I be keeping?
• have I tracked my expenses properly?
• what happens if I get something wrong?

those are all reasonable questions.

The important thing is not to panic. It is simply to start getting things into better order before the deadlines arrive.

What this means for portfolio landlords

If you manage multiple properties, the issue is often less about whether you keep records and more about how consistent those records are.

Many portfolio landlords already have systems in place, but those systems may still need tightening up ahead of Making Tax Digital.

For example:

• are income and expenses easy to separate
• are records kept up to date across all properties
• is your current software suitable
• are you relying on spreadsheets that take a lot of manual work
• do you have a clear process for gathering documents and tracking costs

When you are dealing with several properties at once, even small admin gaps can create bigger issues later on.

How to prepare now without adding to the pressure

For many landlords, the hardest part is knowing where to start.

The good news is that you do not need to sort everything overnight. In most cases, small practical steps now can make a big difference later.

Check your income

Start by looking at your gross rental income rather than your profit.

If you also have self-employed income, that may need to be taken into account too.

Review your current records

Ask yourself how easy it would be to pull together a clear picture of your rental income and expenses today.

Can you find invoices and receipts easily? Are your property finances kept separately from your personal spending? Are your records up to date?

If not, this is the best place to begin.

Get into better habits earlier

A lot of landlords understandably leave their bookkeeping until the tax deadline starts getting closer.

Under quarterly reporting, that approach is likely to become much more stressful.

Keeping things updated more regularly should make the change far more manageable.

Speak to your accountant

If you already have an accountant, it is worth discussing how Making Tax Digital is likely to affect you.

If you do not, getting advice early may still help, especially if your circumstances are less straightforward.

Keep your wider property admin organised

Good property administration supports good tax administration.

When rent records, tenancy paperwork, inspection notes and maintenance costs are all easy to track, it is much easier to stay organised when reporting requirements change.

Can a letting agent help?

A letting agent cannot replace tax advice, but they can make the day-to-day side of being a landlord much easier to manage.

At Bricknells Rentals, we know that a lot of the pressure landlords feel does not come from one big problem. It comes from lots of smaller tasks building up over time. Rent collection, statements, maintenance issues, inspections, tenancy paperwork and compliance all need attention, and it is not always easy to stay on top of everything on your own.

That is where having experienced support can help.

Whether you want a let only service or a fully managed approach, the aim is the same: to make life easier for landlords, keep properties running smoothly and give you clearer records and fewer loose ends to deal with. That practical, landlord-focused support is central to Bricknells’ services and brand position.

What happens if you leave it too late?

Most landlords do not ignore changes like this because they do not care. Usually, it is simply because there is a lot going on, and tax admin gets pushed further down the list until it suddenly becomes urgent.

But leaving preparation too late could mean:

• rushed changes to your record keeping
• missing documents
• avoidable errors
• more stress close to deadlines
• extra time spent correcting things later

A bit of preparation now can take a lot of pressure off later on.

Looking for a bit more support as a landlord?

At Bricknells Rentals, we work with landlords across Rotherham, Sheffield, Barnsley, Doncaster, Worksop and Chesterfield, helping them manage the practical side of letting with less stress and more confidence. The business focuses on residential lettings, property management and landlord services across South Yorkshire and North East Derbyshire, with a professional but approachable style.

Whether you are an accidental landlord, a busy portfolio owner or simply feeling stretched by all the moving parts, having the right support around you can make a real difference.

A calm, organised approach now can save a lot of worry later.