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Posted in   Jun 23 , 2025

Making Tax Digital for Landlords: Everything You Need to Know Before 2028

Making Tax Digital for Landlords: Everything You Need to Know Before 2028

Overview

The way landlords report their rental income to HMRC is changing — significantly. By April 2028, anyone earning over £20,000 per year from property will need to comply with the Government’s Making Tax Digital (MTD) initiative. If you're a landlord, it's essential to understand what’s coming, how it affects you, and how to prepare.

What Is Making Tax Digital?

Making Tax Digital is a Government initiative aimed at modernising the UK tax system. It requires taxpayers to:

  • Keep digital records of property income and expenses

  • Submit quarterly updates to HMRC

  • Use approved MTD-compatible software

  • File a final declaration (similar to the current Self-Assessment return) each year

Instead of the current once-a-year submission, MTD requires quarterly updates followed by a year-end summary.

Quarterly Submission Deadlines:

  • 7th May

  • 7th August

  • 7th November

  • 7th February

Your final annual submission will still be due by 31st January.

Who Will Be Affected – and When?

MTD is being phased in based on income levels:

Start Date
April 2026 
Annual Property Income
£50,000+
Requirement
MTD applies

Start Date
April 2027
Annual Property Income
£30,000+
Requirement
MTD applies

Start Date
April 2028

Annual Property Income
£20,000+

Requirement
MTD applies

If your rental income is below £20,000, you’re not required to comply – yet.

Exemptions from MTD

You may be exempt from the new rules if:

  • You have a Power of Attorney

  • You are a non-UK entertainer/sportsperson with no qualifying UK income

  • HMRC is unable to provide digital access to you

  • You are a limited company landlord (these will continue with Corporation Tax as normal)

Further exemptions are expected to be confirmed in legislation before April 2026.

Penalties for Non-Compliance

MTD will introduce stricter penalties for:

  • Late submissions

  • Inaccurate information

  • Missed deadlines

While the full penalty framework is still under development, the emphasis is clear: get your records in order, or face financial consequences.

How to Prepare for Making Tax Digital

To stay ahead of the game, take the following steps:

  1. Familiarise yourself with the new rules.
    Use HMRC’s official MTD toolkit.

  2. Check your software compatibility.
    Your accounting software must be MTD-compliant to file digital returns.

  3. Practice digital bookkeeping now.
    Even if you’re not required to comply yet, get used to tracking income and expenses digitally.

  4. Consult a tax advisor or accountant.
    Especially important if you have multiple income streams or properties.

Your Software Must Be Able To:

  • Record and store digital financial records

  • Submit quarterly updates to HMRC

  • File the End of Period Statement (EOPS)

  • Communicate via HMRC’s API (Application Programming Interface)

Need help getting ready?
Contact us today and we’ll help you transition smoothly into the digital era of tax reporting.

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