Making Tax Digital for Landlords (MTD ITSA): What UK Property Owners Need to Know for 2026–2028

Making Tax Digital for Income Tax (often shortened to MTD for Income Tax or MTD ITSA) is the biggest change to tax reporting for landlords in a generation. If you receive rental income, you may soon need to keep digital records and send regular updates to HMRC using compatible software.

This guide explains what’s changing for landlords, when it starts (2026–2028), what you’ll need to report, and what you can do now to feel calm and prepared.

What is Making Tax Digital for landlords?

MTD for Income Tax is a new way of reporting your income and expenses to HMRC. Instead of doing everything once a year through the Self Assessment tax return, you’ll:

• Keep digital records of your rental income and property expenses.
• Send quarterly updates to HMRC using MTD-compatible software.
• Complete a year-end finalisation (to confirm your figures and make any adjustments).

It’s important to know what MTD ITSA isn’t:

• It does not automatically mean you’ll pay tax four times a year (more on this below).
• Quarterly updates are not a full tax return. They’re more like regular summaries.
• It doesn’t remove your responsibility to keep proper records—if anything, it makes that responsibility more visible.

Who must comply (and when)? The 2026–2028 rollout

MTD for Income Tax will be introduced in stages based on your total gross income from:

• Self-employment (sole trader), and/or
• Property rental income (UK and/or overseas property, where relevant)

The key dates are:

What does “income” mean here? It’s generally your gross income (turnover) from property and/or self-employment, not your profit. For landlords, that typically means rental income before expenses.

Landlords’ specific reporting needs under MTD ITSA

Landlords often have a few extra complications compared to a straightforward sole trade. MTD doesn’t change the underlying tax rules, but it does mean your record keeping and reporting needs to be tidy and consistent.

1) Multiple properties (and multiple income streams)

If you have more than one rental property, you’ll want a clear system that tracks:

• Rent received per property (and dates received)
• Letting agent statements and fees
• Service charges, ground rents, insurance, repairs, and other running costs
• Periods when a property is empty (voids) and any related costs

MTD software usually allows you to tag transactions and run reports, which makes quarterly updates far easier than trying to reconstruct everything at the year end.

2) Jointly owned property

If you own property jointly (for example with a spouse/partner), you typically declare your share of the income and expenses on your own tax position. Under MTD, each person who is within scope will have their own reporting obligations.

In practice, this means you’ll want:

• A clear record of ownership split (often 50/50, but not always)
• Consistent treatment of income and costs
• A system that avoids double-counting or missing items

3) Furnished Holiday Lets (FHL) and other property types

Property income is not always “one size fits all”. Some landlords have standard residential lets; others have holiday lets or overseas property. The way income is treated can differ, and it’s sensible to get advice if your situation isn’t straightforward.

Even where the tax rules differ, the MTD principle stays the same: keep digital records and submit updates through the year.

4) Mortgage interest and finance costs

Many landlords still assume mortgage interest is simply an expense that reduces profit. For most residential landlords, that’s no longer the case in the old sense; instead, finance costs are usually dealt with via a tax reducer (subject to the rules). MTD won’t change that, but it does mean you need your figures captured properly so your year-end finalisation is correct.

5) Repairs vs improvements (a common landlord pitfall)

Landlords regularly ask whether something is a repair (normally allowable against rental income) or an improvement (often treated as capital and dealt with differently). MTD quarterly updates will be based on your records as you go, so it’s worth getting into the habit of:

• Keeping invoices and notes explaining what the work was
• Separating “routine maintenance” from “upgrade/extension” type work
• Tracking larger projects carefully

If you’re unsure, don’t guess—ask. It’s much easier to classify correctly at the time than to unpick it later.

What you’ll submit under MTD (quarterly updates + year-end)

Under MTD ITSA, landlords will generally have three layers of submission:

Quarterly updates

Four times a year, you’ll send a summary of income and expenses to HMRC through MTD-compatible software. These updates are designed to keep HMRC informed as the year progresses.

Key reassurance: quarterly updates are not the final word. They can be based on your bookkeeping position at that point, and you can correct things later at year end.

End of Period Statement (EOPS)

After the tax year ends, you’ll finalise your property income for the year. This is where you make accounting and tax adjustments and confirm the final figures.

Final Declaration

This is the step that effectively replaces the “signing off” part of the Self Assessment return—bringing together all your income sources and confirming your overall tax position for the year.

Do landlords have to pay income tax quarterly under MTD?

This is one of the biggest worries we hear, so it’s worth being clear.

MTD for Income Tax is about reporting (digital records, quarterly updates, and year-end finalisation). It does not automatically change the dates you pay your tax.

Many landlords will still pay their income tax through the existing Self Assessment payment system (including payments on account where applicable). If payment timings change in the future, HMRC would need to introduce that separately.

What counts as “digital records” for landlords?

Under MTD, you’ll need to keep certain information digitally. For landlords, that generally means:

• Income: date received, amount, and the source (e.g. rent, other property income)
• Expenses: date, amount, supplier, and category (repairs, insurance, agent fees, etc.)

Most landlords find it easiest to do this by:

• Using a separate bank account for rental activity (where possible)
• Connecting the bank feed to software so transactions flow in automatically
• Uploading photos/PDFs of invoices and receipts as they arrive

Can landlords still use spreadsheets?

Some landlords love spreadsheets—and used properly, they can still have a place. However, under MTD the crucial point is that your records and submissions must be made using MTD-compatible software and the information must be transferred via digital links (not manual copy-and-paste in a way that breaks the digital trail).

If you want to keep a spreadsheet-based approach, you’ll usually need bridging software or a compliant setup that can submit to HMRC correctly.

Quarterly update deadlines: what the year typically looks like

MTD quarterly updates follow the tax year, which runs from 6 April to 5 April. Each update covers a three-month period, followed by a submission deadline.

HMRC’s exact submission deadlines can be confirmed as guidance develops, but the key practical point is this: you’ll have four regular deadlines to meet, every year, alongside a year-end finalisation.

For landlords, the easiest way to stay on top of this is to set a monthly routine:

• Upload or forward invoices as you receive them
• Reconcile your bank transactions (so nothing is missing)
• Check your rent and agent statements match what’s in the bank

What MTD means in practice for landlords (day-to-day)

For many landlords, the real change isn’t the tax—it’s the habit. MTD rewards steady, simple routines.

Common landlord expenses to track (and keep evidence for)

MTD doesn’t change what you can and can’t claim, but it does make it more important to record things clearly. Common rental expenses include:

• Letting agent and management fees
• Landlord insurance
• Repairs and maintenance (with invoices)
• Safety certificates (where applicable) and compliance checks
• Service charges and ground rent (leasehold)
• Replacement of domestic items in furnished lets (subject to the rules)
• Accountancy fees relating to the rental business
• Travel costs that are wholly and exclusively for the rental business (keep a note of the purpose)

Tip: keep a short note with each cost: what it was for, which property it relates to, and why it was necessary. It’s helpful for you, and it’s invaluable if HMRC ever asks questions.

How landlords can get ready now (without overcomplicating it)

Even if you’re not in the first wave (April 2026), starting early makes this far less stressful. Here’s a sensible, landlord-friendly plan.

Step 1: Work out whether you’ll be in scope (and when)

Look at your last tax return and identify your gross rental income (and any self-employed income). If you’re near a threshold, it’s worth projecting forward—rent increases or a new property can move you into scope sooner than expected.

Step 2: Choose a record-keeping method you’ll actually stick to

The “best” system is the one you will use consistently. Many landlords do well with simple software that:

• Connects to your bank
• Lets you categorise income and expenses quickly
• Stores copies of receipts/invoices
• Produces quarterly figures without manual rework

Step 3: Separate your rental finances (if possible)

A separate bank account for rental income and costs isn’t legally required, but it can make bookkeeping dramatically easier. It reduces the risk of mixing personal spending with rental transactions, which is one of the biggest causes of errors and missed claims.

Step 4: Set a simple monthly routine

Quarterly updates are much easier if you do 20–30 minutes a month rather than a frantic catch-up every three months. A good routine is:

1. Check all rent has been received (or recorded as arrears).
2. Upload any invoices and label them clearly.
3. Reconcile the bank feed so the balance matches.
4. Flag anything unusual (large repairs, deposits, insurance claims).

Step 5: Don’t leave “difficult” items until the end

If you’ve had a big refurbishment, a new boiler, or a significant change to a property, get advice early on how to treat it. It prevents mistakes being repeated across quarterly updates and avoids a nasty surprise at year end.

What about penalties and late submissions?

MTD comes with regular submission obligations, so it also comes with the need to meet deadlines. HMRC has been moving towards points-based penalty systems for late submissions in other MTD areas, and the direction of travel is clear: repeated late filing is likely to trigger penalties.

The best protection is a steady process and a clear division of responsibility:

• If you do your own bookkeeping, make sure you know what you must do and by when.
• If an accountant helps, agree who is responsible for keeping records up to date and who presses “submit”.

Do you still need an accountant if everything is digital?

Digital reporting doesn’t remove the need for judgement. Landlords still face questions like:

• Is this cost a repair or an improvement?
• How do I treat mortgage interest and finance costs correctly?
• What’s the right approach for jointly owned property?
• How do I deal with one-off items and year-end adjustments?

Software is excellent for capturing transactions and producing totals. A good accountant helps you keep those totals correct, compliant, and tax-efficient—especially at the year-end finalisation stage.

Landlord MTD readiness checklist

Final thoughts: calm preparation beats last-minute panic

For landlords, MTD for Income Tax is mainly a shift towards better, more regular record keeping. If you start now—choosing a simple system, keeping documents in order, and building a light monthly routine—you’ll avoid the stress that comes from trying to change everything at once.

If you’re not sure whether you’ll be in scope in April 2026, or you’d like help setting up a landlord-friendly workflow, it’s worth getting advice early. It’s much easier to put good habits in place than to fix problems after deadlines start arriving every quarter.