How to Prepare for Making Tax Digital as a Landlord

As a UK landlord, managing your tax obligations is about to change with Making Tax Digital (MTD) for Income Tax, starting 6 April 2026. At Talwar Accountant, we’re here to guide you through this shift. This guide explains MTD’s impact on landlords with rental income and how to prepare for its rollout.

What Is MTD for Landlords?

MTD requires landlords with rental income above £50,000 (£30,000 from 6 April 2027) to submit quarterly digital updates of income and expenses to HMRC, plus an annual End of Period Statement. This applies to your 2026/27 tax year rental income if it exceeds the threshold, replacing parts of the Self Assessment process. The goal is real-time tax reporting, but it demands new systems for compliance.

Digital Record-Keeping

MTD mandates digital records for all rental income (e.g., rent payments) and allowable expenses (e.g., repairs, agent fees). Paper records won’t suffice. You’ll need to track:

• Gross rental income per property
• Expenses like insurance, maintenance, or legal fees

Poor record-keeping risks penalties. Use digital tools to store receipts and invoices securely.

Choosing Compatible Software

HMRC requires MTD-compliant software for submissions. Options include:

• FreeAgent: User-friendly for landlords, with expense tracking and MTD support
• Xero: Ideal for managing multiple properties
• QuickBooks: Offers rental income categorization and reporting

Costs range from £10-£30/month. Test software early to ensure smooth quarterly updates.

Understanding Quarterly Updates

Quarterly updates summarize your rental income and expenses for HMRC, submitted within one month after each quarter (e.g., July, October, January, April). These aren’t full tax returns but inform HMRC of your tax position. You’ll also submit an annual statement to finalize your taxes, due by 31 January. Accurate, real-time records are essential to avoid errors or penalties.

Getting Ready for April 2026

Start preparing now to ease the transition:

• Assess Your Income: Check if your rental income exceeds £50,000 (combine all properties)
• Adopt Digital Tools: Begin using MTD software to track income and expenses
• Organize Records: Digitize existing receipts and tenancy agreements
• Learn the Process: Familiarize yourself with quarterly deadlines and HMRC’s MTD portal
• Seek Advice: Consult a professional to confirm compliance and optimize tax planning

Example: Priya, a landlord with three properties, started using Xero to track her £60,000 rental income. By digitizing records early, she’s ready for MTD’s quarterly updates, avoiding last-minute stress.

To summarise landlords must:

• Keep digital records of all income/expenses
• Use MTD-compatible software
• Submit quarterly updates and a final end of period statement

Stay Ahead with Talwar Accountant

MTD brings new responsibilities, but early preparation ensures compliance. For personalized guidance on digital record-keeping or MTD setup, contact Talwar Accountant. We’re here to help you navigate the 2026 rollout with confidence.

Kind regards,

Jagdeep Singh ATT
Talwar Accountants
https://www.talwaraccountants.com/home-page