How to Prepare for Making Tax Digital (Landlord Migration Guide)

Step 1: Calculate your gross property income

Add up all your rental income before expenses. This is gross, not profit. If you exceed £50,000, you're in scope from April 2026. Between £30,000 and £50,000, you're in scope from April 2028.

Include rent from all properties, service charges collected, and any other property-related income.

Step 2: Review your current record-keeping system

What do you use now? Spreadsheets? Shoeboxes of receipts? Bank statements? Understanding your starting point helps plan the migration.

Identify:

• Where income records are kept
• How you track expenses
• How organised (or disorganised) things are
• How much historical data exists

Step 3: Research MTD-compatible software options

You need HMRC-approved software. Options include:

• Specialist landlord software: Built for property, understands landlord needs
• General accounting software: QuickBooks, Xero, FreeAgent—widely used, well-supported
• Bridging software: Connects spreadsheets to HMRC (temporary solution)

Consider: ease of use, cost, features, support, and whether it handles multiple properties well.

Step 4: Choose and set up your software

Pick one and start. Many offer free trials—use them. Set up your account, add your properties, configure income and expense categories.

Don't overthink this—you can switch later if needed, but starting is better than waiting for the "perfect" solution.

Step 5: Migrate historical records to digital format

Import your existing records. Most software accepts CSV imports from spreadsheets. You may need to:

• Clean up your data (consistent formats, categories)
• Map your categories to the software's structure
• Enter some data manually if it's messy

Start with the current tax year; go further back if you have time.

Step 6: Set up bank feeds if available

Bank feeds automatically import transactions from your bank account into your software. This is a game-changer for record-keeping—no manual entry, no missed transactions.

Most MTD software supports Open Banking connections. Link your rental account(s) and watch transactions flow in.

Step 7: Create a routine for regular record updates

MTD requires quarterly updates. Build the habit now. Set a weekly or monthly time to:

• Review and categorise new transactions
• Match rent payments to tenants
• Upload expense receipts
• Reconcile bank statements

Regularity makes each session quick. Leaving it until quarter-end makes it painful.

Step 8: Practice quarterly submissions (shadow year)

Before MTD is mandatory, do a "shadow year" where you practice the quarterly process. Submit updates to yourself (or through the software's test mode) as if it were real.

This reveals problems before they matter. You'll learn the workflow, spot gaps in your records, and build confidence.

Step 9: Register with HMRC when registration opens

HMRC will open MTD registration closer to April 2026. By then, you'll be ready. Registration connects your software to HMRC's systems. Once registered, you're committed—but you'll be confident from all that practice.