Imagine this: It’s April 2026, and instead of scrambling to gather a year’s worth of rental receipts, you’re already organised. Your tax information is just a few clicks away. Welcome to Making Tax Digital for Income Tax (MTD for IT), a significant change that will soon affect thousands of UK landlords.
What is Making Tax Digital for Income Tax?
MTD for IT is the government’s new approach to tax reporting, requiring digital record-keeping and quarterly submissions to HMRC. It’s designed to simplify how landlords report their property income and expenses, replacing the traditional annual tax return with more frequent, easier updates.
Who Does This Affect?
Not all landlords are immediately impacted, but the timeline is clear:
| Tax Year | Turnover Threshold | Who is Affected? |
|---|---|---|
| 2026/27 | £50,000+ (in 2024/25) | Landlords and self-employed |
| 2027/28 | £30,000+ (in 2025/26) | Additional landlords and self-employed |
If your rental or self-employment income exceeds these thresholds, you’ll need to comply with MTD requirements.
Watch: Understand MTD for IT in Two Minutes
Here’s a brief video from HMRC that explains exactly how MTD for Income Tax works and why it matters to you:
Why is MTD for IT Important?
Digital record-keeping is no longer optional. HMRC wants accurate, real-time information to ensure the correct amount of tax is collected, money that supports public services like the NHS and stimulates economic growth.
As the video highlights, quarterly digital submissions mean your end-of-year tax return is almost complete when the year ends, simplifying the reporting process significantly.
How Does This Affect You as a Landlord?
Traditionally, you might have gathered receipts, invoices, and bank statements once a year in a frantic dash. With MTD, this stress transforms into quarterly bite-sized submissions, making life simpler for landlords.
But adapting early is essential. Landlords who delay preparation risk facing stressful last-minute transitions or even financial penalties.
Practical Steps Landlords Should Take Now:
- Check your turnover: Determine if you meet the threshold (£50,000 in 2024/25 or £30,000 in 2025/26).
- Choose compatible software: Ensure your digital accounting system is HMRC-approved.
- Go digital early: Start digitising your records now to be fully prepared well before the deadline.
Act Now, Thank Yourself Later
Change is coming, whether you’re prepared or not. But, like navigating that boat downstream, preparation makes all the difference between smooth sailing and turbulent waters.
Start preparing now, and when the digital shift comes, you’ll already be ahead of the current.
Need support navigating the switch to Making Tax Digital? Contact Wainwrights Accountants today, we’re here to help guide your journey smoothly.
