Our latest webinar - key points on Making Tax Digital
Last month we hosted a webinar for landlords with key speakers from the industry. Included in this blog are the key takeaways from the second of our key speakers, Matthew Perkins, a Making Tax Digital expert from Hammock.
The government’s Making Tax Digital for Income Tax (MTD) initiative is reshaping how landlords manage and report their tax. Designed to modernise the system and reduce errors, MTD replaces the traditional annual self-assessment with digital record keeping, quarterly submissions,and a final annual declaration.
If you’re a landlord, it’s essential to understand when MTD will apply to you, how it will work, and what steps you need to take to prepare.
Who needs to comply with MTD — and when?
MTD for Income Tax is being rolled out in stages based on income thresholds. Here’s the timeline for landlords and sole traders:
- From April 2026: Landlords and sole traders with a turnover of £50,000 or more.
- From April 2027: The threshold reduces to include Landlords and sole traders with a turnover of £30,000 and above
- From April 2028: The threshold reduces to include Landlords and sole traders with a turnover of £20,000 and above.
If your rental income falls below £20,000, you’ll continue to use self-assessment for now — but it’s worth preparing early.
How will MTD work for Landlords?
Once MTD applies to you, you’ll need to use HMRC-recognised software to:
✅ Maintain your records digitally;
✅ Store receipts and income information electronically (no more paper files!);
✅ Submit quarterly summaries of income and expenses to HMRC, and;
✅ Complete a Final Declaration at the end of each tax year to confirm your figures and settle any remaining tax liabilities.
The Final Declaration effectively replaces your current self-assessment tax return.
Your new tax calendar: Quarterly submissions and a Final Declaration
Under MTD, landlords will submit quarterly updates to HMRC. These updates provide summaries of your rental income and expenses for each period.
Quarterly update deadlines:
5th August — covering 6th April to 5th July
5th November — covering 6th July to 5th October
5th February — covering 6th October to 5th January
5th May — covering 6th January to 5th April
Finally, you’ll need to submit your Final Declaration by 31st January following the end of the tax year — confirming your total income (including other sources) and settling any outstanding tax.
With MTD just six months away, landlords should start preparing now to avoid a rush once reporting becomes mandatory.
Which income streams are included?
Not all types of income are subject to MTD reporting. The rules apply to:
Included:
- Rental income (including income from jointly owned properties), and;
- Self-employment income.
Not included:
- PAYE and pension income;
- Dividend income or savings interest, and;
- Rental income from limited companies or partnerships
Jointly Owned Properties: How to calculate your share
When it comes to jointly owned properties, only your individual share of the rental income counts toward your MTD threshold.
For example, if a property earns £40,000 in annual rent and you own 50%, only £20,000 is counted toward your threshold.
With MTD deadlines fast approaching, now is the perfect time to go digital.
Get in touch with your local branch or property manager to learn how we can help you prepare for Making Tax Digital.
