Making Tax Digital is Coming – Here’s What Landlords Need to Know

A major change is potentially coming to the way landlords and self-employed people manage their tax. As yet nothing is cast in stone but here is the information we have now and our recommendations with plans for the future.

From April 2026, Making Tax Digital (MTD) for Income Tax will completely modernise how you record and report your income – marking the biggest shift since Self-Assessment launched more than 30 years ago.

At iERO, we want to make sure our landlords are prepared well in advance. Here’s everything you need to know.

Who Will Be Affected?

The rollout will happen in stages, based on your annual income:

• From April 2026: Sole traders and landlords earning over £50,000
• From April 2027: Sole traders and landlords earning over £30,000
• From April 2028: Sole traders and landlords earning over £20,000

If your rental or self-employed income falls into one of these categories, you’ll need to start using MTD-compatible software to manage your records.

What’s Changing?

Under the new system, you’ll need to keep digital records of your property and/or self-employment income using recognised software.

You’ll then send quarterly updates to HMRC – short summaries showing how your business or rental income is performing. These aren’t full tax returns, but simple snapshots drawn from your records.

Don’t worry – you won’t need to pay tax four times a year. Your payment deadline remains 31 January, but by submitting quarterly updates, you’ll have a much clearer picture of your tax position throughout the year.

Why This Change Will Help

While it might sound like more admin, MTD is designed to make life easier. It helps to:

• Reduce errors and avoid costly corrections later
• Keep your records accurate and up to date, so no more last-minute scrambles for receipts
• Give you a better overview of your finances and upcoming tax obligations
• Forecast your tax bill, helping you plan ahead with fewer surprises
• Simplify your record-keeping on one new HMRC platform

In short, MTD should make managing your tax more transparent, efficient, and less stressful.

How to Get Ready – A Quick Checklist

Here’s how to prepare for Making Tax Digital:

✅ Check if you’re affected – Add up your total income from self-employment and property to see when you’ll need to start.

✅ Know your start date:

• £50,000+ (2024–25) – start from 6 April 2026
• £30,000+ (2025–26) – start from 6 April 2027
• £20,000+ (2026–27) – start from 6 April 2028

✅ Choose your software – Find MTD-compatible accounting software that suits your needs. Good news > There are free and/or low-cost options for straightforward accounts.

✅ Speak to your accountant. – Make sure they’re ready for MTD and can access the right tools. We highly recommend and Edinburgh based company called AH&Co Chartered  Accountants:  https://www.ah-ltd.co.uk/. That’s who we get our advice from and we have worked with them for over 10 years, so we’re happy to recommend them to you!

✅ Sign up early for testing – HMRC is inviting people to try the system now, with support from their dedicated MTD team. It’s a great way to build confidence before it becomes mandatory.

✅ Start keeping digital records now – Begin using your chosen software so you’re fully comfortable before your official start date. We have some recommendations below. 

Get MTD-Ready Early

Don’t wait until the deadline — start preparing now.

Landlord-specific software 

These tools are built specifically for landlords and offer integrated property management and accounting features. 

• Hammock: Designed for landlords, it connects directly to your bank accounts to provide real-time income and expense tracking. It offers full MTD for Income Tax (IT) integration and can be accessed via browser or mobile app. 

• Landlord Vision: A comprehensive property management and accounting solution for all portfolio sizes. It handles rent tracking, maintenance, and tenancy management in addition to MTD compliance. 

• Landlord Studio: This software is available as a slick mobile app, which is useful for tracking income and expenses and scanning receipts on the go. It also offers property management tools alongside MTD support. 

To comply with Making Tax Digital (MTD), you’ll need to keep your business and property records using recognised digital software that connects directly to HMRC. This software will record your income and expenses, generate your quarterly updates automatically, and help you stay organised throughout the year.

Popular HMRC-approved options include:

• QuickBooks – user-friendly, ideal for small businesses and landlords
• Xero – excellent for real-time reporting and linking bank transactions. They also have a Low-Cost service due for release soon specially for this legislation change.
• FreeAgent – designed for freelancers and small landlords
• Sage Accounting – robust for multi-property or larger portfolios
• Zoho Books – affordable and HMRC-compatible alternative

Whichever system you choose, make sure it’s MTD-compatible and that you’ve linked your HMRC account well in advance of April 2026. Doing this early means you can test the software, correct any setup issues, and be fully confident before quarterly submissions become mandatory.