Making Tax Digital for Landlords: Complete 2026 Guide
If you earn rental income from UK property, Making Tax Digital almost certainly affects you. From 6 April 2026, landlords with gross property income (or combined property and self-employment income) exceeding £50,000 must keep digital records and submit quarterly updates to HMRC using MTD-compatible software.
The threshold drops to £30,000 in April 2027 and £20,000 in April 2028 — eventually bringing the vast majority of UK landlords into scope.
How is the £50,000 threshold calculated?
This is the most common trap for property owners. HMRC looks at your gross rental income before any expenses — your total rent received, not your profit after mortgage interest, repairs, and letting agent fees.
Example: Two buy-to-let properties each generating £2,000/month = £48,000 gross. Add £3,000 of freelance consulting income and your combined qualifying income is £51,000. You are in scope.
What do landlords need to record digitally?
Under MTD rules, paper receipts in a shoebox are no longer compliant. Every item of rental income and property expense must be logged digitally:
- Rent received from each property
- Service charges and ground rent
- Maintenance and repair costs
- Letting agent and management fees
- Landlord insurance premiums
- Mortgage interest (noting Section 24 restrictions)
Jointly owned property
If you own property jointly with a spouse or business partner, each person reports their share of the income separately. Both individuals may need to comply independently if their personal share pushes them over the threshold.
Which software is best for landlords?
QuickBooks (from £10/month) is our top pick for landlords — it’s the cheapest option with Self-Assessment filing included and handles property income well. GoSimpleTax (from £58/year) is strong for simple portfolios with annual billing. If your accountant has a preference, follow it — most use Xero.
The Section 24 trap
Many landlords forget that mortgage interest relief is now restricted to a 20% tax credit rather than a full expense deduction. This means your taxable income can be significantly higher than your actual profit. MTD software won’t handle this calculation for you automatically — make sure you or your accountant account for it in your end-of-year declaration.