Making Tax Digital (MTD) for Income Tax is coming and if you’re a UK landlord with property in your personal name, it’s something you’ll want to get ahead of now.
In this guide, we’ll break down what MTD for landlords actually means, who it applies to, when you need to start, what “digital records” really are, and what you’ll need to submit to HMRC each quarter. We’ll also cover software options (including bridging software), and how MTD works if you use an accountant.
If you’d prefer to watch rather than read, you can also catch the webinar recording here.
What is Making Tax Digital for landlords?
Making Tax Digital for Income Tax changes how landlords keep records and report income to HMRC. Instead of doing everything once a year via the HMRC web portal, MTD requires:
- Digital record keeping (per transaction)
- Quarterly submissions of year-to-date totals
- An end-of-year finalisation (your annual tax return, completed via MTD-compatible software)
Important: tax payment dates don’t change. You’ll still pay tax on the same schedule as you do today.
Who does MTD apply to?
MTD applies to landlords who own property in their personal name (not exclusively in a limited company), and who meet the income thresholds. For landlords, the key number is gross property income (total rent received) not profit.
MTD thresholds (property income / gross rent)
- £50,000+ rent per year: MTD starts April 2026
- £30,000+ rent per year: MTD starts April 2027
- £20,000+ rent per year: MTD starts April 2028
These thresholds are also combined with sole trader turnover if you have both property income and self-employment income. (Paid employment income is not included.)
A note on timing if your income is increasing
HMRC links your MTD start date to the figures you’ve declared on your previous tax return. In practice, that means you generally become required to join MTD after HMRC has seen a return showing you’re above the threshold.
If you’re close to a threshold, this can create edge cases where you know you’ll go over soon, but you may not be required immediately. If in doubt, it’s worth checking with an accountant or preparing early so you’re not rushing later.
What if you own property jointly?
If a property is owned jointly (e.g., 50/50), then only your share of the rent counts toward your threshold.
Example:
A property generates £30,000 rent/year, owned 50/50: your share is £15,000.
The same split applies to expenses: you only report your portion. In software like PaTMa, this split can be handled automatically once ownership percentages are set.
Each person who is required to use MTD must make their own submissions to HMRC, but they can be generated from the same underlying records.
What do you have to do under MTD?
Once you are within scope, MTD follows a predictable rhythm each tax year:
1) Start keeping digital records (from April)
You must keep records in a way that stores each transaction digitally (not just totals).
2) Submit quarterly updates
At the end of each quarter, you submit a summary of your property income and expenses year-to-date.
For example:
- Quarter 1 submission covers April to July
- Quarter 2 covers April to October (so Q1 totals are resubmitted as part of the year-to-date figures)
- Quarter 3 covers April to January
- Quarter 4 covers April to April
This year-to-date approach is useful, because it allows you to correct missing items in later quarters.
3) End-of-year finalisation (annual return)
You still complete your annual return, but you can’t use the HMRC web portal once you’re on MTD. You must use MTD-compatible software to finalise and submit your tax return.
What counts as “digital records”?
This is the part that catches people out. Under MTD, it’s not enough to keep a box of receipts, and it’s not enough to type quarterly totals into a spreadsheet. HMRC requires you to store transaction-level records digitally.
For rent transactions, you typically need:
- date
- amount
- what it relates to (property / tenancy)
For expense transactions, you typically need:
- date
- amount
- description
- tax category (so it’s filed correctly)
You can store additional info (like receipts/invoices, notes, supplier details), but the key requirement is: each transaction must be recorded digitally.
What is a quarterly submission?
Quarterly submissions are essentially a shorter version of the property pages in a self-assessment return (SA105-style figures). You submit totals for:
- rent received (year-to-date)
- expenses by category (year-to-date)
HMRC has said quarterly submissions do not need to be perfect, but they should be “close to accurate”. You can correct later quarters if something was missing. However, it is still important to avoid obvious issues, for example:
- mis-categorising finance costs (interest)
- incorrectly treating capital costs as revenue expenses
Those errors can distort the picture significantly.
Choosing software for MTD: landlord software vs accounting software
To comply with MTD, you need software that can:
- store digital records (transaction-level)
- submit quarterly updates to HMRC
- (and eventually) submit the end-of-year finalisation
There are two broad options:
Option 1: Landlord-focused software
Landlord software is typically designed around property workflows and compliance (tenancies, rent schedules, documents, reminders, safety certificates, maintenance), and also handles finances.
This tends to feel more intuitive for landlords because it’s built around landlord language rather than accounting terminology.
Option 2: Accounting-focused software
Accounting software is primarily built for bookkeeping and may support MTD submissions, but it usually doesn’t include landlord-specific workflows like compliance reminders, tenancy details, or property management processes.
Some accounting tools offer limited property breakdowns, but depth and landlord-specific reporting varies.
What about bridging software and spreadsheets?
Bridging software is designed to let you keep records in a spreadsheet and “bridge” totals to HMRC.
But there are limitations:
- Your spreadsheet must store transaction-level details, not just totals
- Totals must be calculated using formulas (not typed manually after the fact)
- Many bridging tools only support quarterly submissions, not end-of-year finalisation
- If you still need separate software for the annual return, bridging can become less cost-effective
Bridging may work best for smaller portfolios where a spreadsheet is manageable, but it’s worth checking whether your chosen approach supports both quarterly and annual requirements.
What if you use an accountant?
Even if your accountant handles your annual return today, MTD adds quarterly submissions and there are a few ways landlords and accountants might split responsibilities:
Scenario 1: Accountant does everything (quarterly + annual)
You provide the raw info each quarter, and your accountant creates the digital records and sends submissions.
Scenario 2: You keep digital records, accountant submits
You record transactions in your system and share access or export records. Accountant handles quarterly submissions and the annual return.
Scenario 3: You do quarterly submissions, accountant finalises annually
Because quarterly submissions don’t need to be perfect, some landlords will record transactions and submit quarterly updates themselves, then the accountant checks and finalises everything at year end.
How Making Tax Digital works in PaTMa
In the webinar demo, we showed how PaTMa handles Making Tax Digital to show you a typical tax submission workflow, here are the basic steps:
- Connect your bank feed (Open Banking)
- Process transactions:
- match mortgage payments
- match rent payments to expected rent schedules
- Connect PaTMa to HMRC
- Review the quarterly totals
- Submit to HMRC with a single confirmation step
PaTMa can also handle ownership splits (e.g., joint ownership), so each landlord’s share is calculated appropriately.
To see it in action to get a feel for how MTD works in practice, check out the webinar recording here.
Frequently asked questions
Is paid employment income included in the £50,000/£30,000/£20,000 thresholds?
No. The thresholds are based on property income (gross rent) and sole trader turnover (if applicable). Employment income is not included.
How accurate do quarterly categories need to be?
Quarterly submissions don’t need to be perfect, but they should be reasonable and consistent. Some categories (like finance costs/interest) are particularly important to separate correctly.
Do I still file a normal annual return?
Yes, but once you’re on MTD, you must complete it using MTD-compatible software, not the HMRC web portal.
Next steps: what landlords should do now
- Work out your gross rent and whether you’re likely to hit a threshold
- Decide whether you want to use landlord software, accounting software, bridging software, or an accountant-led approach
- Start building a habit of transaction-level record keeping so you’re not scrambling close to your start date
- If you want to see MTD in action, watch the webinar recording.
