If you’re a landlord, big changes are on the way for how you report your rental income to HMRC.
From April 2026, the Government’s Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) scheme will come into force. This means the way you keep records, report income, and interact with HMRC will be very different.
Let’s walk through who’s affected, when the changes start, and what you need to do to get prepared.
What Is MTD for ITSA?
Making Tax Digital for Income Tax Self Assessment is part of HMRC’s long-term plan to digitise the UK tax system.
If you’re a sole trader or unincorporated landlord, and your combined business and rental income is above a certain threshold, you’ll need to:
- Keep digital records
- Use MTD-compatible software
- Submit quarterly income and expense summaries
- Finalise your annual tax return with a year-end declaration
It’s a big shift from the current once-a-year Self Assessment return.
Key Start Dates – When Does It Apply to You?
From 6 April 2026, MTD for ITSA will apply to you if your total income from property and/or sole trader businesses is £50,000 or more.
So, if you earn:
- £10,000 from rental income and
- £45,000 from self-employment,
you’ll fall within the rules from this date.
But if you only have rental income of £49,000 and no self-employment income, you won’t be caught by the rules just yet.
The relevant income figure will be based on your 2024/25 Self Assessment tax return, which must be submitted by 31 January 2026.
Once you’re in the system, you stay in—unless your income drops below the threshold for three consecutive tax years.
From 6 April 2027
The threshold will drop to £30,000, meaning more landlords and sole traders will be brought into the fold.
Future Plans
Eventually, the Government aims to extend MTD for ITSA to those with income of £20,000 or more, though no date has been confirmed yet.
What Changes Under MTD for ITSA?
Right now, most landlords simply:
- Report income and expenses once a year via Self Assessment
- Keep records in whatever format suits them
Under MTD for ITSA, you’ll need to:
- Keep digital records of all income and expenses
- Use MTD-approved software
- Submit quarterly updates to HMRC:
- Quarters end on 5 July, 5 October, 5 January, and 5 April
- Or you can choose to align with calendar quarters: 30 June, 30 September, 31 December, and 31 March
After the final quarter, you’ll submit a year-end declaration—similar to today’s tax return—where you’ll:
- Finalise figures
- Claim reliefs and allowances
- Add any other income not reported under MTD (e.g. employment, savings)
Just like now, you’ll need to declare that the return is complete and correct.
What Isn’t Changing?
- Payment deadlines stay the same
- The amount of tax due doesn’t change
- You’ll still have to pay any tax owed by the usual deadlines
HMRC Software Support
HMRC maintains a list of compatible software providers—and has promised to offer free software for those with the simplest tax affairs.
So, whether you’re already using cloud-based accounting tools or keeping things on paper, there’s time to plan your move.
Get Ready Now to Avoid a Last-Minute Rush
April 2026 may feel a while away—but it’ll come around fast.
If your income is over £50,000, you’ll be among the first landlords affected. And with quarterly reports, digital record-keeping, and new software to learn, it pays to get ahead of the curve.
Need Help Preparing for Making Tax Digital?
At Jon Davies Accountants, we help landlords and small business owners stay one step ahead of tax changes.
If you’re unsure whether MTD will apply to you, or you want help choosing the right software and getting your records in shape, we’re here to help.
Get in touch with Jon or the team today to start preparing now—before the rules catch you off guard.
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Any questions?
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