Landlords with property income over £30,000 are being urged to prepare for Making Tax Digital, with the next stage of the rollout coming into effect in April 2027.
HM Revenue and Customs has reminded landlords that they may need to start keeping digital records and sending quarterly updates through compatible software.
The reminder comes as HMRC begins contacting people who will need to use the system in the next stage of its rollout.
Who will need to use Making Tax Digital?
Making Tax Digital for Income Tax is being introduced in stages based on qualifying income.
For landlords, qualifying income is based on total property and self-employment income before expenses and tax allowances are deducted.
The rollout is currently:
- Over £50,000: MTD started from 6 April 2026
- Over £30,000: MTD starts from 6 April 2027
- Over £20,000: MTD starts from 6 April 2028
This means landlords earning more than £30,000 but no more than £50,000 from qualifying income should now be preparing for the April 2027 deadline.
What will landlords have to do?
Landlords within the rules will need to:
- Keep digital records of property income and expenses
- Use Making Tax Digital-compatible software
- Send quarterly updates to HMRC
- Complete their annual tax return through the system
- Continue paying their tax by the normal deadlines
The quarterly updates are not additional tax returns. They are summaries of income and expenses sent to HMRC throughout the year.
Why should landlords prepare now?
HMRC is encouraging affected landlords to sign up early rather than waiting to be contacted.
Getting started early gives landlords time to check their income, choose compatible software and make sure their records are accurate before the requirements become mandatory.
For landlords managing several properties, this also means having a reliable way to keep track of rental income, expenses and property records throughout the year rather than trying to gather everything together at tax-return time.
What should landlords do now?
If you think you may fall within the £30,000 threshold from April 2027, now is a good time to:
1. Check your qualifying income
Work out your total property and self-employment income before expenses.
2. Review your records
Make sure your rental income and expenses are being recorded accurately.
3. Choose compatible software
MTD requires software that can create digital records and send updates to HMRC.
4. Start getting organised
Keeping property and financial information up to date throughout the year can make the transition much easier.
The takeaway for landlords
Making Tax Digital is becoming a bigger part of how landlords manage their tax affairs.
With the next threshold coming into effect in April 2027, landlords with qualifying income over £30,000 have less than six months to prepare.
The earlier landlords understand their obligations and move their records into a suitable digital system, the easier it should be to adapt when the rules apply.
Frequently Asked Questions
When does Making Tax Digital apply to landlords earning over £30,000?
From 6 April 2027, provided their qualifying income is over £30,000.
Does rental income count towards the threshold?
Yes. Qualifying income includes property income and self-employment income, calculated before expenses and tax allowances.
Are quarterly updates the same as tax returns?
No. Quarterly updates are summaries of income and expenses. Landlords will still need to complete their annual tax return and pay tax as normal.
