Date Published 23 May 2025
Landlords are being advised to start preparing for Making Tax Digital (MTD) for Income Tax, despite the new rules not coming into force until April 2026. The changes will significantly impact how landlords report rental income and manage their tax obligations.
Under MTD, landlords with annual property income of £50,000 or more will be required to keep digital records, submit quarterly updates to HMRC, and complete a final year-end declaration. The income threshold will drop to £30,000 from April 2027, bringing even more landlords into the new regime.
'Making Tax Digital is part of the government's strategy to modernise the tax system and reduce errors,' explains David Crowter of accountancy firm Carpenter Box. 'It means landlords earning over the threshold will need to maintain their records digitally and comply with a quarterly and annual reporting cycle—or risk fines for non-compliance. However, self-assessment payments and deadlines will remain the same.'
For landlords, this means recording the amount, type, and date of every rental income and expense transaction in a digital format. If you also have another business—for example, you're self-employed—separate quarterly submissions will be required for each, meaning up to eight submissions per year.
Crowter emphasises the importance of early action: 'Although the start date is still nearly a year away, landlords should begin preparing now. The right digital tools and advice can make the transition smoother and ensure compliance without unnecessary stress.' With significant changes ahead, landlords are encouraged to speak with a tax adviser or accountant to ensure they're ready well before the deadline.
If you require any support or guidance on how to prepare for this, Adams Estates would be more than happy to be of assistance.
