Making Tax Digital Expands in April 2027: Implications for Landlords Earning £30,000+

The UK’s transition toward a fully digital tax system continues with the next phase of Making Tax Digital (MTD).

From April 2027, landlords with gross annual income exceeding £30,000 will be brought within scope of the regime, significantly extending the reach of digital reporting requirements across the private rented sector.

This follows the initial rollout in April 2026, which applies to those earning above £50,000.

Scope of the April 2027 Expansion

Under the updated framework:

Landlords with gross rental income above £30,000 will be required to comply

The threshold applies to total gross income, not net profit

Combined income from property and self-employment will be assessed collectively

This second phase will capture a substantial number of landlords who are not currently within the MTD regime.

Core Requirements Under MTD

Landlords within scope will be required to:

Maintain digital records of all income and allowable expenses

Submit quarterly updates to HMRC

Complete a final annual declaration to confirm taxable income

This represents a shift from the traditional annual Self Assessment model to a system of more frequent, structured reporting.

Clarifying a Common Misconception

There is a widespread assumption that MTD requires landlords to personally manage accounting systems and submissions.

In practice:

Most landlords will continue to engage a qualified accountant

Accountants will oversee compliance and submissions to HMRC

MTD-compatible software, such as Xero or equivalent platforms, will be used to facilitate reporting

Landlords remain responsible for maintaining accurate and complete records

MTD alters the reporting process, but not the underlying reliance on professional advice and systems.

Digital Record-Keeping Requirements

To comply with MTD, landlords must ensure that records are maintained in a digital format, including:

Rental income received

Allowable expenses

Transaction dates and supporting details

Spreadsheets remain permissible where they are integrated with HMRC via bridging software, ensuring compliance with digital submission standards.

Operational Considerations

The introduction of MTD is expected to have several practical implications:

Increased frequency of reporting obligations

Greater reliance on digital tools and processes

Heightened importance of accurate, real-time record-keeping

At the same time, the system may provide:

Improved financial visibility across property portfolios

Reduced reliance on year-end reconciliation

More consistent financial oversight

Preparing for April 2027

Landlords likely to fall within scope should take early steps to prepare.

Assess income levels

Confirm whether gross rental income exceeds, or is expected to exceed, the £30,000 threshold.

Engage with a tax adviser

Discuss how MTD will apply and identify the most appropriate reporting structure.

Review current processes

Ensure existing record-keeping practices can transition to digital formats where necessary.

Familiarise with compliant systems

Understand the role of MTD-compatible software, even where an accountant will manage submissions.

Looking Ahead

The April 2027 expansion represents a continuation of HMRC’s broader strategy to modernise tax administration.

Further reductions in the income threshold may be introduced in future phases, potentially extending MTD obligations to a wider group of landlords.

Conclusion

The extension of Making Tax Digital to landlords earning above £30,000 marks a significant development in tax compliance requirements.

While the transition introduces more frequent reporting, it does not fundamentally change the role of professional advisers or the importance of accurate financial records.