Important Tax Change for Landlords
Important Tax Change for Landlords: Making Tax Digital Is Coming (and Expanding)
Important Tax Change for Landlords: Making Tax Digital Is Coming (and Expanding)
Landlords across the UK need to prepare for a major change in how rental income is reported to HMRC. Making Tax Digital (MTD) for Income Tax is being rolled out in stages, and over the next few years it will affect a growing number of property owners.
At Allen Residential, we want to ensure our landlords are aware of what’s coming and have time to prepare.
What is Making Tax Digital (MTD)?
Making Tax Digital is an HMRC initiative designed to modernise the UK tax system. It requires landlords and sole traders to keep digital records and submit income information more frequently using approved software.
When Does MTD Start for Landlords?
MTD for Income Tax will be introduced in phases, based on your qualifying income (this includes income from property, self-employment, or a combination of both):
From 6 April 2026 – if your qualifying income is over £50,000
From 6 April 2027 – if your qualifying income is over £30,000
From 6 April 2028 (planned) – if your qualifying income is over £20,000
As the threshold reduces, many more landlords will be brought into the MTD system, including those with smaller portfolios. This makes early preparation especially important.
What Will Landlords Need to Do?
If you fall within the MTD requirements, you will need to:
Keep digital records of rental income and allowable expenses
Use MTD-compatible accounting software
Submit quarterly updates to HMRC, rather than relying solely on an annual tax return
While this does not change how much tax you pay, it does change how and when information is reported.
Why You Should Prepare Early
Even if you’re not affected immediately, upcoming threshold reductions mean MTD may apply to you in the near future. Setting up digital record-keeping and understanding the process early can help avoid last-minute stress and potential penalties.
Where to Find Official Guidance
HMRC has published step-by-step guidance explaining how Making Tax Digital for Income Tax works and how to prepare. You can view the official guidance here:
https://www.gov.uk/government/collections/making-tax-digital-for-income-tax-for-businesses-step-by-step
How Allen Residential Can Help
As your letting agent, Allen Residential does not provide tax advice, but we believe it’s important our landlords are informed about changes that may affect them.
If you don’t currently have an accountant, or would like help understanding how MTD may apply to your circumstances, please contact us and we can put you in touch with a qualified accountant who can provide professional advice.
If you have any general questions, the Allen Residential team is always happy to help
