For many landlords, tax reporting has followed a familiar pattern for years: collect records, submit a Self Assessment return, and deal with tax once the year has ended.
Making Tax Digital (MTD) introduces a different approach. From April 2026, some landlords will begin reporting rental income in a more structured, digital way throughout the tax year rather than relying solely on an annual return.
For landlords who prefer practical planning over last-minute changes, understanding how the tax year itself will work under the new system is often more useful than reading technical guidance.
What the landlord tax year looks like today
Under the current system, many landlords keep records during the year but only formally report income and expenses at the end of the tax year.
While that annual submission will still exist, Making Tax Digital introduces additional reporting points during the year for landlords who fall within scope. This shifts reporting from a single task into a process spread more evenly across the year.
How the tax year will work under Making Tax Digital
From 6 April 2026, landlords with qualifying income over £50,000 from property and/or self-employment will be required to use Making Tax Digital for Income Tax.
Instead of one main reporting moment, landlords within scope will need to:
- keep rental income and allowable expenses recorded digitally
- submit summary updates to HMRC during the tax year using compatible software
- complete a final end-of-year submission to confirm figures
These updates are summaries, not tax bills, and they do not change when tax is paid.
Why the income threshold matters
One important detail is how the threshold is calculated.
Making Tax Digital is based on gross income, not profit. Rental income is counted before expenses are deducted, which means landlords with multiple properties or higher rental values may reach the threshold sooner than expected, even where margins are carefully managed.
HMRC has confirmed that the threshold will reduce over time:
- from April 2027: income over £30,000
- from April 2028: income over £20,000 (subject to legislation)
As a result, many landlords who are not affected in 2026 may fall within the scope in later years.
What stays the same under the new system
Although reporting becomes more regular, some familiar elements remain unchanged.
Income Tax will still be calculated annually, and payment deadlines will not move. Tax will continue to be due by 31 January following the end of the tax year.
Making Tax Digital changes how information is submitted, not how much tax is owed or when it must be paid.
Decisions landlords will need to make about software and support
HMRC will not provide its own software for Making Tax Digital.
Landlords will need to use MTD-compatible software to keep records and submit updates. Some may choose to manage this themselves, while others may prefer to work with an accountant or adviser.
Deciding which approach suits your circumstances ahead of time can help ensure the transition is smooth when the new rules apply.
Preparing steadily rather than reacting later
For most landlords, preparation does not require major changes overnight.
Keeping rental records clear, reviewing income levels against the threshold, and understanding how expenses are tracked can all help make the move to Making Tax Digital easier to manage.
Taking a steady, organised approach now often avoids unnecessary pressure closer to April 2026.
Local guidance from Newton Fallowell
Making Tax Digital introduces a new way of managing rental income reporting, effective from April 2026, for landlords with qualifying income above the threshold.
Newton Fallowell supports landlords with professional property management, clear rental documentation, and practical local guidance to help keep reporting organised as requirements evolve. If you would like advice on preparing for Making Tax Digital, speak to your local Newton Fallowell branch.
