One of the most significant changes to personal taxation in recent years is now under way. HMRC’s Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is being rolled out in phases from April 2026, and residential landlords are firmly in its scope. Here is what you need to know.
What is Making Tax Digital for Income Tax?
MTD for ITSA replaces the traditional annual Self Assessment tax return with a system of quarterly digital reporting. Landlords affected must keep digital records of their income and expenses using HMRC-compatible software and submit updates to HMRC four times a year, followed by a final declaration at the end of the tax year.
Who Does It Affect and When?
The rules are being introduced in three stages, based on qualifying income — which includes rental income alongside any self-employment income:
From 6 April 2026, landlords whose qualifying income exceeded £50,000 in the 2024–25 tax year must comply. From 6 April 2027, the threshold drops to £30,000, based on income in the 2025–26 tax year. From 6 April 2028, it will extend further to those earning over £20,000, based on income in the 2026–27 tax year.
If you are unsure whether you are affected, HMRC will write to you if your income exceeds the relevant threshold — but it remains your responsibility to check. HMRC’s eligibility tool is available at gov.uk.
What Do You Need to Do?
You will need to choose and set up HMRC-approved software before your start date, authorise it with HMRC, and begin submitting quarterly updates. You will still file an annual tax return, but the quarterly updates will form the backbone of your reporting. HMRC has confirmed that landlords joining in April 2026 will not receive penalty points for late quarterly updates during the first 12 months, offering some breathing space during the transition.
Our Advice
If your rental income is approaching or exceeding any of the thresholds above, we strongly recommend speaking with your accountant or tax adviser now. The earlier you put compatible software in place and establish good record-keeping habits, the smoother the transition will be.
At Pure Residential Lettings and Management, we keep our landlords informed of regulatory changes that affect them. If you have any questions about how MTD may affect your rental portfolio, please do not hesitate to contact Lee Bilbrough – lee@purepropertylettings.co.uk