Making Tax Digital for Income Tax (often called MTD ITSA) is HMRC's move to end the annual paper-style tax return for landlords and the self-employed. Instead of one return after the tax year, you'll keep digital records and report to HMRC every quarter using compatible software.
The rules are being introduced in stages based on how much you earn, so the date it affects you depends on your income. Below is exactly when it starts, who it applies to, and the practical steps to prepare.
When does Making Tax Digital for landlords start?
Making Tax Digital for Income Tax starts from 6 April 2026 for landlords and sole traders whose combined self-employment and property income is over £50,000. Those earning over £30,000 join from April 2027, and over £20,000 from April 2028. Your income level decides your start date.
MTD ITSA is being phased in by qualifying income rather than switched on for everyone at once. HMRC looks at your gross income from self-employment and property on your most recent tax return to decide when you're mandated. The thresholds step down each year, gradually pulling in landlords with smaller portfolios.
| Tax year | Who is mandated | Qualifying income threshold |
|---|---|---|
| From April 2026 | Landlords & sole traders | Over £50,000 |
| From April 2027 | Landlords & sole traders | Over £30,000 |
| From April 2028 | Landlords & sole traders | Over £20,000 |
Landlords with qualifying income at or below £20,000 are not yet in scope. The Government has said it intends to bring smaller earners in over time, but no confirmed date sits below the £20,000 tier. You can confirm your own start date with our free MTD readiness checker.
What counts towards the MTD income threshold?
The threshold is based on your gross qualifying income — your total rental turnover plus any self-employment turnover — before expenses. It is not your profit. If you have both a rental portfolio and a side business, HMRC adds the two together to test whether you cross the threshold.
This catches out a lot of landlords. A common misunderstanding is that the figure is taxable profit, so people assume they're under the limit. In fact HMRC uses total income received, so a landlord with £30,000 of rent and £25,000 from a small business would be over £50,000 combined and mandated from April 2026 — even if their profit is modest after mortgage interest and costs.
- Property income: all rental turnover across your UK and overseas properties, before deducting expenses.
- Self-employment income: turnover from any sole trader business, added to the above.
- Excluded: employment (PAYE) income, dividends and most investment income don't count towards the qualifying threshold.
What do landlords actually have to do under MTD?
You must keep digital records of rental income and expenses, send HMRC a quarterly update summarising them four times a year, and submit a final declaration after the tax year to confirm your figures and any adjustments. This replaces the annual Self Assessment return once you're mandated.
In practice, MTD ITSA has three moving parts:
1. Keep digital records
Every item of rental income and each allowable expense must be recorded digitally in MTD-compatible software. Paper ledgers and standalone spreadsheets no longer satisfy the rules on their own — a spreadsheet must be linked to HMRC through bridging software. Software that captures receipts and categorises expenses as you go makes this far less painful.
2. Send quarterly updates
Four times a year you send HMRC a running summary of income and expenses for each source. These are cumulative totals, not four separate mini-returns, and they aren't a tax bill — no payment is due at each update. The deadlines fall roughly one month after each quarter end.
3. Submit a final declaration
After the tax year ends you make a final declaration, adding any reliefs, adjustments and other income to finalise your position. This confirms your tax for the year and replaces the Self Assessment return you file today. Your payment dates through Self Assessment stay the same.
Jointly owned property? Each owner reports their own share of the rental income under their own MTD obligations. The threshold test applies to your individual share, not the property's total rent.
Do I still file a Self Assessment tax return?
Once you're mandated for MTD ITSA, the quarterly updates and final declaration replace the property pages of your Self Assessment return. Until your start date arrives, you carry on filing Self Assessment as normal. There is no overlap where you do both for the same income.
If you have other income that still needs reporting — such as dividends or capital gains — this is handled through the final declaration process rather than a separate return. The final declaration effectively becomes your new year-end filing.
How should landlords prepare for Making Tax Digital?
Check whether your income puts you in the April 2026, 2027 or 2028 group, then get onto MTD-compatible software well before your start date. Move to digital record-keeping early so quarterly updates become routine rather than a scramble, and keep income and expense evidence organised from day one.
A sensible order of preparation:
- Find your start date. Add up your gross property and self-employment income and match it to the timeline above.
- Choose compatible software. HMRC keeps a list of approved products; property-focused tools like PAM's MTD filing are built around SA105 property income specifically.
- Digitise your records now. Start logging rent and expenses digitally this tax year so you're not migrating mid-mandate.
- Practise the quarterly rhythm. Reconciling every three months is a habit worth building before it becomes compulsory.
Landlords who prepare early tend to find MTD reduces year-end stress, because the work is spread across the year instead of landing in one January panic. The change is significant, but with digital records in place from the start it's very manageable.
MTD ITSA doesn't change how much tax you pay — it changes how and how often you report it. Getting your records digital early is the single most useful step.