MTD for Income Tax: what landlords must do from April 2026

Making Tax Digital for Income Tax (MTD IT) is the biggest change to Self Assessment since it was introduced. Instead of one tax return a year, HMRC now requires affected landlords and sole traders to keep digital records and send four quarterly updates a year — through recognised software. A spreadsheet and a shoebox of receipts no longer count.

Who is affected, and when

*Gross income means your combined turnover from self-employment plus property income before expenses — not your profit. A landlord with £32,000 of rent and £15,000 of costs is over the 2027 threshold.

What you actually have to do

• Keep digital records — every income and expense item, categorised, in software.
• Send quarterly updates — a summary of income and expenses for each quarter, due roughly a month after the quarter ends.
• Finalise the year — a final declaration replaces the old tax return.

What happens if you ignore it

Late quarterly updates earn penalty points; at four points you receive a £200 fine, and further lateness keeps adding £200 a time. Those who joined in April 2026 get a 12-month grace period on points — which ends in April 2027.

What to do now

Work out your gross income for the last tax year. If you're over the threshold — or will be when it drops — start keeping digital records now, so your first mandatory quarter isn't a scramble. See our guide to the exact quarterly deadlines.