Making Tax Digital (MTD) for Income Tax is here and landlords with a rental income above the £50,000 threshold will need to comply.

HMRC has been sending out letters to landlords warning them that digital reporting will soon become mandatory.

If you received one of these letters, you must take it seriously, as your tax reporting obligations have now changed.

What is MTD for Income Tax?

MTD for Income Tax is HMRC’s move towards a fully digital tax system.

Since 6 April 2026, landlords with a gross annual income of over £50,000 have fallen into the first phase and will need to:

  • Keep digital records of all rental income and expenses
  • Use HMRC-compatible software to submit data
  • Provide quarterly updates to HMRC
  • Complete an annual end-of-year declaration

Quarterly reporting will not replace your annual Self-Assessment. It does mean you will interact with HMRC more regularly and you will need accurate records from the start of the tax year.

Will you be affected by MTD for Income Tax?

MTD for Income Tax will be introduced in stages, based on your rental income:

  • April 2026 – rental income over £50,000 in the 2024/25 tax year
  • April 2027 – rental income over £30,000 in the 2025/26 tax year
  • April 2028 – rental income over £20,000 in the 2026/27 tax year

Landlords in the first phase will need to submit their first quarterly update by 7 August 2026 and digital records must cover the full tax year from 6 April.

You will also still need to file your 2025/26 Self-Assessment return by 31 January 2027.

What are the MTD for Income Tax letters from HMRC?

HMRC had sent out letters to landlords and sole traders who must comply with MTD for Income Tax this April.

These letters explained:

  • What MTD for Income Tax is
  • When you will need to start reporting digitally
  • How quarterly reporting will work
  • Differences from the current Self-Assessment process
  • The steps you need to take now to stay compliant

The letters were issued in batches between February and March, based on previous Self-Assessment filings.

What to do if you received an MTD for Income Tax letter?

Receiving a letter should not be a cause for panic if you understand your new obligations and how to stay compliant.

If you received a letter, you should have confirmed that you are affected and eligible for MTD for Income Tax this April.

While HMRC’s data is usually accurate, the responsibility sits with you to know when you are affected and to stay compliant.

You then should have:

  • Chosen MTD-compatible software to manage your digital records and submit quarterly updates
  • Signed up for MTD yourself as HMRC will not register you automatically
  • Started digital record-keeping
  • Shared the letter with your accountant or bookkeeper, as they will not have received a copy

If you did not receive a letter, it does not mean you are exempt. If your rental income exceeds the thresholds, you will still need to comply.

How can we help you stay compliant with MTD for Income Tax?

The countdown is now over and you should have the right digital record-keeping processes and MTD software in place by now.

It is time to let go of the spreadsheets and paper records and make sure you understand your requirements.

We are here to help you stay compliant and meet your deadlines so you can reduce the risk of errors or penalties.

We can take some of the pressure off you and handle quarterly submissions on your behalf and give you peace of mind that your tax returns are accurate.

If you need further advice on staying compliant with MTD for Income Tax, contact us today.