Making Tax Digital April 2026: What Every Landlord Needs to Do

Why April 2026 matters — the biggest tax change in a generation

April 2026 is when Making Tax Digital for Income Tax becomes mandatory law for the first wave of affected taxpayers. After years of delays, the date is confirmed and HMRC is not expected to postpone again.

Making Tax Digital has had a troubled legislative history. Originally announced in 2015, it was delayed from 2018, then 2020, then 2023, then 2024. Each delay undermined confidence that it would ever arrive. That period of scepticism is over.

HMRC launched a national television and radio advertising campaign in late 2025 to raise awareness of the April 2026 deadline. If you have watched terrestrial television recently, you have almost certainly seen the ads. The campaign is targeted at the estimated 864,000 sole traders and landlords in the first mandatory cohort.

The legislation is already on the statute books. The Finance Act 2021 and subsequent regulations provide the legal basis for mandatory MTD from April 2026. This is not a consultation or a draft — it is law.

The consequences of missing the April 2026 date are real. HMRC's new points-based penalty system means that non-compliance accumulates, and the first financial penalty of £200 arrives once four penalty points have been accrued. Get behind from day one and you will be catching up all year.

For the background on what Making Tax Digital is and how it works, see our plain English guide to Making Tax Digital.

Who must use Making Tax Digital from April 2026?

You must use Making Tax Digital from 6 April 2026 if your qualifying gross income from property and/or self-employment exceeded £50,000 in the 2024/25 tax year.

The critical rules:

It is gross income, not net profit

The £50,000 threshold applies to your total income before any expenses or deductions. A landlord receiving £52,000 in rent who spends £40,000 on mortgage interest, repairs, and management fees has a profit of only £12,000 — but qualifying income of £52,000. They are in scope from April 2026.

Property and self-employment income are combined

If you have both rental income and self-employment trading income, the two are added together. A landlord earning £28,000 in rent and £26,000 from a freelance business has £54,000 in qualifying income and is in scope.

PAYE employment income does not count

Income from a conventional job — where your employer deducts tax through PAYE — is not qualifying income for MTD purposes. Only self-employment and property income count towards the threshold. A landlord with £30,000 in rent and £60,000 in PAYE salary has only £30,000 in qualifying income and is not in scope until April 2027 at the earliest.

Sole traders and individual landlords only

MTD for Income Tax applies to individuals filing Self Assessment returns. It does not apply to limited companies (which file Corporation Tax returns). If you hold your properties in a limited company, you are not affected by the April 2026 deadline.

Both UK and overseas property counts

If you are a UK taxpayer with overseas property, the rental income from those properties counts towards your qualifying income. UK tax residents must include worldwide income in their Self Assessment, and the same applies under MTD.

The reference year is 2024/25

To determine your obligation for 6 April 2026 onwards, HMRC looks at your qualifying income in the 2024/25 tax year (6 April 2024 to 5 April 2025). If you are currently preparing your 2024/25 Self Assessment return, that is the return that determines your April 2026 status.

For the complete breakdown of thresholds and how they work in different scenarios, see our guide to MTD income thresholds.

What exactly happens on 6 April 2026?

On 6 April 2026, the 2026/27 tax year begins and qualifying landlords must start recording income and expenses digitally in HMRC-approved software. The first quarterly update deadline falls on 5 August 2026.

The shift is not gradual. There is no overlap period where you can carry on with annual Self Assessment while also trying out MTD. From 6 April 2026, if you are in scope:

• Annual Self Assessment is no longer available for your property and self-employment income. You cannot simply file a Self Assessment return for 2026/27 as you have in previous years.
• Digital record-keeping begins. Every item of rental income received and every expense paid from 6 April 2026 must be recorded in your approved MTD software.
• Q1 tracking starts. The software begins accumulating figures for the first quarter: 6 April to 5 July 2026.
• Your HMRC account reflects your MTD status. If you have signed up correctly, your HMRC online account will show your MTD obligations rather than a Self Assessment return.

The transition is software-managed. Once you have signed up and authorised your software, HMRC's system recognises you as an MTD taxpayer. Your software handles the formatting, timing, and API submission. You do not need to interact with HMRC's portal directly for quarterly updates — it all goes through your software.

The April 2026 action plan — what to do right now

With April 2026 weeks away, landlords in scope need to check eligibility, choose software, sign up with HMRC, and start digital record-keeping by 6 April. The entire process takes a few hours, not weeks.

Step 1: Confirm you are in scope

Pull out your 2024/25 figures. Add up all gross rental income received between 6 April 2024 and 5 April 2025 — the total on your bank statements, not after expenses. Add any self-employment trading income. If the combined total is above £50,000, proceed to Step 2.

Step 2: Choose HMRC-recognised software

Visit gov.uk and search “Making Tax Digital software” for the current approved list. For landlords, key options include:

• LandlordOS — Free for 1-2 properties, designed specifically for UK rental income, with built-in MTD quarterly submission
• QuickBooks Self-Employed — Bank feed integration and MTD submission
• FreeAgent — User-friendly, suited to smaller portfolios
• Xero — More features, preferred by accountants

Your software must be on the approved list. Do not assume a product is compliant because it offers accounting features — MTD approval must be explicit.

Step 3: Sign up for MTD on gov.uk

Once your software is set up, sign up for Making Tax Digital for Income Tax through your Government Gateway account. The sign-up process requires:

• Your Government Gateway user ID and password
• Your National Insurance number
• Your Unique Taxpayer Reference (UTR)
• Your chosen software already set up and ready to authorise

For detailed instructions on the sign-up process, see our guide to registering for Making Tax Digital.

Step 4: Authorise your software to connect to HMRC

During sign-up, you authorise your software to communicate with HMRC on your behalf. This typically involves clicking an authorisation link within the software and signing in with your Government Gateway credentials. Once authorised, your software can submit quarterly updates and retrieve your MTD obligations from HMRC.

Step 5: Start keeping digital records from 6 April 2026

From the first day of the tax year (6 April 2026), record every transaction in your software. Most landlords find the simplest approach is to:

• Connect their rental income bank account to the software's bank feed for automatic transaction import
• Photograph receipts immediately and attach them to the relevant expense transaction
• Categorise transactions weekly rather than leaving it to the quarter-end

Step 6: Submit your first quarterly update by 5 August 2026

When Q1 closes (5 July 2026), your software will have a complete picture of the quarter's income and expenses. Review the figures, make any corrections, and submit. Most software reduces this to a few clicks. Your software sends the update directly to HMRC; you do not need to log in to gov.uk.

For the complete step-by-step registration process, see our dedicated MTD registration guide.

The soft landing — no penalties for late quarterly updates in 2026/27

HMRC has confirmed that no penalty points will be issued for late quarterly updates during the 2026/27 tax year. This soft landing applies to the first four quarterly updates only — not to the Final Declaration.

The soft landing is a genuine concession. HMRC recognises that the transition to quarterly reporting will take time to bed in, and has confirmed in its guidance that it will not issue late submission penalty points for quarterly updates submitted after the deadline during 2026/27.

What the soft landing covers:

• Q1 update (due 5 August 2026)
• Q2 update (due 5 November 2026)
• Q3 update (due 5 February 2027)
• Q4 update (due 5 May 2027)

What the soft landing does NOT cover:

• The Final Declaration, due 31 January 2027, remains subject to the existing Self Assessment penalty regime
• Late payment penalties — if you owe tax and do not pay by 31 January, interest and late payment penalties still apply
• Deliberate non-compliance or fraud — the soft landing is for genuine late submission, not wilful avoidance

The soft landing does not mean you should aim to file quarterly updates late. The point of quarterly reporting is to keep your records current, and leaving everything to a catch-up creates the same year-end pressure that MTD is designed to eliminate. Treat the soft landing as a safety net, not a strategy.

From 2027/28 onwards, the points-based penalty system applies in full. Each late quarterly update earns one penalty point; four points trigger a £200 financial penalty; further late submissions while at four points each generate a further £200. See our guide to the MTD penalty system for full details.

The Making Tax Digital quarterly calendar for 2026/27

The 2026/27 tax year has four quarterly update deadlines, starting with 5 August 2026, and a Final Declaration deadline of 31 January 2027.

Note that the Final Declaration deadline of 31 January 2027 falls before the Q4 update deadline of 5 May 2027. You must file your Final Declaration before Q4 is even due. This means you will typically file the Final Declaration based on your Q1-Q3 figures plus an estimate for Q4, then update HMRC with the final Q4 figures in the May submission. Your tax payment remains due on 31 January.

For the complete calendar of quarterly deadlines, see our guide to MTD quarterly update deadlines.

What if you don't sign up by April 2026?

If you are in scope and do not sign up for Making Tax Digital by 6 April 2026, you will be in breach of your obligations from day one of the 2026/27 tax year.

The consequences of non-compliance build over time:

The points-based penalty system

Each missed or late quarterly update earns one penalty point. The system works as follows:

Points expire after two years of full compliance (no late submissions). To clear your points balance, you must submit all required updates on time for 24 consecutive months.

Remember: the soft landing means no points are issued for quarterly updates in 2026/27. But if you are still non-compliant in 2027/28, the full penalty system applies from the first missed deadline of that year.

Late payment penalties and interest

Separate from the points system, late payment of the tax you owe generates:

• A first late payment penalty after 15 days
• A second late payment penalty after 30 days
• Daily interest at the Bank of England base rate plus 2.5% from day 1 of being late

The tax payment due dates themselves do not change under MTD. If you owe tax for 2026/27, it is due on 31 January 2027 (or in two instalments on account if applicable).

What about landlords just below £50,000?

If your 2024/25 qualifying income is below £50,000, you are not in scope for April 2026 — but April 2027 brings the threshold down to £30,000. Landlords earning £30,000–£50,000 should start preparing now.

April 2027: threshold drops to £30,000

From 6 April 2027, Making Tax Digital becomes mandatory for individuals with qualifying income above £30,000. The reference year for this phase is 2025/26. If your gross income from property and self-employment in 2025/26 is above £30,000, you must use MTD from April 2027.

April 2028: threshold may drop further to £20,000

The Government has consulted on extending MTD to those earning over £20,000. Legislation for this phase had not been passed at the time of writing, but it is widely expected to proceed. If confirmed, the reference year for April 2028 eligibility would be 2026/27 qualifying income.

Checking your position if you are close to £50,000

If your gross rental income is in the £40,000–£55,000 range, be precise about your calculation. Common errors include:

• Using net profit instead of gross rent received
• Forgetting to include income from all properties (including a second property you do not think of as “a portfolio”)
• Overlooking furnished holiday letting income (now taxed as property income following the abolition of the FHL regime in April 2025)
• Forgetting to add self-employment income to property income

Voluntary sign-up is available regardless of income

Any landlord can sign up for MTD voluntarily, even if their income is well below £30,000. The pilot scheme is open. Signing up early gives you time to establish digital record-keeping habits before they become legally required — and modern MTD software saves time at tax season regardless of whether MTD is mandatory for you.

April 2026 and jointly owned properties

For jointly owned properties, each co-owner's share of the income counts towards their individual qualifying income total — not the property's total income. Each owner's MTD eligibility is assessed separately.

This matters for married couples and civil partners, business partners, and joint investors who own properties together.

Example: A couple jointly owns three properties generating £84,000 per year in gross rent. The default income split is 50/50, so each owner has £42,000 in qualifying income. Neither is in scope for April 2026 (both below £50,000). They would both fall into scope from April 2027 when the threshold drops to £30,000.

Example: Two unrelated investors jointly own properties generating £110,000 per year. Split 50/50, each has £55,000 in qualifying income and both are in scope from April 2026.

If the income split is not 50/50 (for example if HMRC has been notified of a different beneficial ownership split via a Form 17), the actual split applies to the qualifying income calculation.

Each owner must sign up for MTD individually and must maintain their own digital records. One partner cannot file on behalf of the other unless acting as a formal tax agent.