Do Landlords Need to Use Making Tax Digital?
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Yes, from April 2026 landlords with property income over £50,000 must use Making Tax Digital. From April 2028, the threshold drops to £30,000. Below these thresholds, MTD is voluntary but available.
Making Tax Digital (MTD) for Income Tax is coming for landlords. Here's how to tell if you're affected and what you need to do.
Do I have to use MTD as a landlord?
You must use MTD if your gross property income exceeds the threshold. This is mandatory, not optional. If you're above the threshold and don't comply, you'll face penalties.
The key question is: what's your gross rental income?
This means your total rent received before any deductions. If you receive £60,000 in rent but your expenses bring profit down to £20,000, you're still above the threshold based on the £60,000 gross figure.
What are the income thresholds?
£50,000 gross income from April 2026. £30,000 from April 2028. The threshold is based on your gross property income, not profit.
| Date | Threshold | Status |
|---|---|---|
| April 2026 | £50,000+ | Mandatory |
| April 2028 | £30,000+ | Mandatory |
| Below threshold | Any amount | Voluntary |
Around 780,000 landlords are expected to be in the first cohort (April 2026). The second cohort adds approximately 900,000 more.
How is property income calculated?
Add up all rent received across all your properties before any expenses. This is gross income. Don't deduct mortgage interest, repairs, management fees, or any other costs.
What counts:
- Residential rental income
- Commercial rental income
- Furnished holiday lettings
- Income from land
Example:
You have two properties. Property A brings in £30,000/year rent, Property B brings in £25,000/year. Your gross property income is £55,000—above the April 2026 threshold, even if expenses reduce your actual profit significantly.
What if I'm just below the threshold?
If you're close to the threshold, consider voluntary MTD adoption. It helps you prepare, and if your income increases or thresholds drop further, you'll already be compliant.
Reasons to adopt early:
- Learn the system before it's mandatory
- Digital record-keeping is useful regardless
- Bank feeds save time on bookkeeping
- Ready if your income grows
What happens if I don't comply?
Penalties start at £100 for late submission. A points-based system means repeated late filing accumulates consequences. Eventually, penalties can be based on tax owed.
Penalty structure:
- Each late submission = 1 point
- 4 points (quarterly filers) = £200 penalty
- Further late submissions while at threshold = £200 each
- Points expire after 24 months of compliance
Plus interest on any late tax payments at Bank of England base rate plus 2.5%.
Frequently asked questions
I only have one property - do I need MTD?
Only if your gross rental income exceeds the threshold. One high-value property could trigger MTD. It's about income, not property count.
Can I use spreadsheets for MTD?
No. Spreadsheets alone are explicitly non-compliant. You need HMRC-approved software that submits quarterly updates digitally.
When should I start preparing?
Now. Migrating records and learning new software takes time. Start 12+ months before your mandatory date to avoid last-minute stress.
Managing this yourself?
LandlordOS helps UK landlords stay compliant and organised:
- Automatic compliance reminders for Gas Safety, EICR, EPC
- Document storage with AI-powered certificate reading
- Tenancy tracking and rent management
LandlordOS tip
Check your rental income now against the thresholds. If you're over £50,000 gross, you have until April 2026 to get compliant. Set up software, migrate your records, and practice quarterly submissions before it counts.