Making Tax Digital for landlords

Do landlords have to use Making Tax Digital?

Yes, if your income is over the threshold. It applies if you’re a sole trader or a landlord registered for Self Assessment, and you get income from property, self-employment or both. When you start depends on your income in an earlier tax year:

HMRC checks your tax return each year and writes to you if you need to start. Do not wait for the letter: If you did not receive a letter, it is still your responsibility to check if and when you need to use Making Tax Digital for Income Tax.

Making Tax Digital for Income Tax explained, with every deadline

What counts as qualifying income for a landlord?

Your rent and your self-employed income, added together, before any costs come off. GOV.UK: Qualifying income is your total income from self-employment and property. This is the amount before expenses (also known as turnover). So a landlord with a large mortgage and a small profit can still be over the threshold.

All other sources of income do not count towards your qualifying income. That means these are left out:

• wages from a job taxed through PAYE
• your share of profit from a partnership
• dividends, including from your own company
• the State Pension and private pensions

Source: GOV.UK, Work out your qualifying income for Making Tax Digital for Income Tax.

Do I need it if I have rent and a little self-employed work?

Add the two together and compare the total with the threshold. Take a landlord who lets one house for £24,000 a year and earns £8,000 a year from self-employed work, the same every year.

If they own the house alone, they have £32,000 of qualifying income. That is over £30,000 in the 2025 to 2026 tax year, so they must use Making Tax Digital from 6 April 2027. Neither income would be over that on its own; it is the total that counts. In 2027 to 2028, their first year, a late quarterly update gets no penalty point (a plan, could change).

If they own the house half and half with someone else, only half the rent counts, so their total is £20,000. GOV.UK says You are automatically exempt and do not need to use Making Tax Digital for Income Tax if your qualifying income is £20,000 or less. If their income grows past that later, the rules apply again.

How does Making Tax Digital work if I own a property jointly?

Each owner looks at their own share. Your share of the property income will count towards your qualifying income, and each joint owner checks the threshold separately.

• Your records cover your share only. You only need to create digital records that relate to your share of income and expenses from your jointly let properties.
• Expenses can wait until the year end. For jointly let property you can send rent only in your quarterly updates. But GOV.UK says: If you choose not to include your expenses for jointly let properties, you must report them after the end of the tax year.
• If you only hear about your share after costs. If you jointly own a property and only receive notice of your share of the income after expenses have been deducted, then we’ll assess that figure for your qualifying income.

Properties you own outright are different: their costs still go in every quarterly update.

What records does a landlord need to keep for Making Tax Digital?

A digital record of every bit of rent you receive and every cost you pay, for example property income such as your rent and property expenses such as costs of repairs. Each record needs the amount, the date and the type of income or cost.

You do not need a separate set for each house. All your UK lets count as one business: they are legally treated as one ‘UK property business’ and you do not need to create separate digital records for each UK property that you have.

Two things are specific to landlords. Mortgage payments: GOV.UK says if you make a mortgage payment, you will need to create a digital record of either the interest or the full amount. If you record the full payment, it is adjusted before your tax return. And if you let homes rather than shops or offices, you must also note whether each cost is a finance cost: If it is an expense, record whether the expense is for a restricted finance cost.

How long to keep your business records

What are quarterly updates for a landlord?

A short summary of your rent and costs for the tax year so far, sent from your software. GOV.UK says: these are summaries of your self-employment and property income and expenses, they are not tax returns. So HMRC sees totals, not each receipt.

• One for each business. GOV.UK: you need to send your quarterly updates to HMRC every 3 months for each self-employment and property business you have. A landlord who is also self-employed sends two.
• Even in an empty quarter. A house that stood empty and cost nothing still needs an update. GOV.UK says: If you have not received any income or incurred any expenses during an update period, you must still send your quarterly update to tell HMRC.
• Plus a tax return at the end. You still add any other income sources you have and submit your tax return by 31 January the following year, using the same software. You may see this called the final declaration.

The update dates are the same for everyone. The penalty rules depend on when you start, including a first-year break for people who must start from 6 April 2027, and are set out in our Making Tax Digital penalties guide. What the Budget changed.

What software do landlords need for Making Tax Digital?

Software that works with Making Tax Digital for Income Tax and handles property income. GOV.UK lists recognised products in its software finder, and HMRC does not recommend any one of them.

You can keep using a spreadsheet: if you use spreadsheets to record income and expenses, bridging software can connect to them and make your submissions to HMRC. But pick one product for your lettings, because you cannot use more than one software product to send quarterly updates of your property income or expenses.

How do landlords sign up for Making Tax Digital?

Online, with the same user ID and password you use for Self Assessment. You need to be registered for Self Assessment and to have sent a tax return in the last two years. Choose your software first, then sign up. You will be asked for your business start date or the date you started receiving property income (if this is within the last 2 tax years).

If you leave it, HMRC may do it for you, using only what it already holds about you. From September 2026, HMRC will start to sign up anyone who needs to use Making Tax Digital for Income Tax for the 2026 to 2027 tax year and has not signed themselves up.

Which landlords are exempt from Making Tax Digital?

Mainly those with a low income, and those who cannot use a computer. The main ones for landlords:

• Qualifying income of £20,000 or less. This is automatic; you do not apply.
• Digitally excluded. You apply, for example if your age, health condition or disability stops you from using a computer, tablet or smartphone to keep digital records or submit them to HMRC. HMRC will not accept that it will take extra time or cost for you to sign up to and use Making Tax Digital for Income Tax, on its own.
• Letting through a partnership. Partnerships do not currently need to use Making Tax Digital for Income Tax.
• Not UK resident, or claiming qualifying care relief. The Budget on 28 October 2026 announced exemptions until further notice for people expected to be non-UK resident, people who can claim qualifying care relief, such as foster carers, and non-UK resident foreign entertainers and sportspeople (set by regulations). The regulations are due before April 2027.

If you are exempt, you still send a Self Assessment tax return as normal.

Source: GOV.UK, Find out if you can get an exemption from Making Tax Digital for Income Tax, which also lists exemptions for some overseas and other cases.

Other questions landlords ask