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 and sole traders should be aware of a significant upcoming tax change from HMRC that will affect how income is recorded and reported.
From 6 April 2026, HMRC is introducing Making Tax Digital (MTD) for Income Tax for landlords and sole traders with qualifying income over £50,000. Qualifying income includes income from property, self-employment, or a combination of both.
At Allen Residential, we want to ensure our landlords are informed early so there is plenty of time to prepare.
What does this mean for landlords?
If you’re affected, you’ll need to:
Keep digital records of income and expenses
Use MTD-compatible software
Submit quarterly updates to HMRC, rather than only an annual tax return
While this does not change how much tax you pay, it does change how often and how your income information is submitted.
Why this matters even if you’re not affected yet
What’s really important is that the qualifying income threshold will reduce in future years, meaning many more landlords will be brought into the MTD system:
From 6 April 2027 – if qualifying income is over £30,000
From 6 April 2028 (planned) – the threshold is expected to reduce to £20,000
This planned reduction will catch a significant number of landlords, including those with smaller portfolios, which is why early preparation is strongly recommended.
Official guidance
You can read HMRC’s official step-by-step guidance on Making Tax Digital for Income Tax 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 aware of changes that may impact them.
If you don’t currently have an accountant and would like more information, please contact us and we can put you in touch with a qualified accountant who can provide appropriate advice and guidance.
