Making Tax Digital for Income Tax

What Landlords Need to Know Ahead of April 2026

With less than one months to go, Making Tax Digital for Income Tax is moving from discussion into reality.   From April 2026, many landlords will need to change how they record and report their income. Whilst this may feel like a significant shift, with the right preparation it can be managed in a straightforward and structured way.

Who Will Be Affected First
From April 2026, the new rules will apply to:

• Landlords and sole traders with income above £50,000
• HMRC will assess this based on your 2024 to 2025 tax return, so this is already in motion behind the scenes.

Further changes will follow:

• From April 2027 for those earning above £30,000
• From April 2028 for those earning above £20,000

This is a phased approach, but for many landlords, the first stage is now very close.

What Is Changing
The key difference is how income is recorded and reported.   Instead of submitting one annual return, landlords will be required to:

• Keep digital records of income and expenses
• Submit updates to HMRC on a quarterly basis
• Use software that is compatible with Making Tax Digital
• There is flexibility in how you meet these requirements, and the right approach will depend on how you currently manage your records.

Choosing the Right Software
There is flexibility in how you meet these requirements, and the right approach will depend on how you currently manage your records.   In general, there are two options:

• All in one software
  A single system that keeps records and submits updates. This tends to suit landlords with more complex portfolios or those looking for a more streamlined approach.
• Bridging software
  This connects existing records, such as spreadsheets, to HMRC. It can be a practical option for those with simpler arrangements who prefer to keep their current system.

Some landlords may choose to use a combination of both.

There are also both free and paid options available, with varying features such as reminders and receipt tracking. The right choice is the one that fits comfortably with how you already work.

A Sensible Next Step

The most important thing now is preparation.   Taking time to understand the requirements, reviewing how you currently manage your records and selecting appropriate software will make the transition far smoother.

For many landlords, this will simply be a case of moving from a yearly process to a more regular, structured one.

A More Structured Way of Managing Income

Whilst this is a change in process, it also brings an opportunity to have clearer visibility over your property income throughout the year.  As with many changes in the sector, those who prepare early will find the transition straightforward.

At Home Sales and Lettings, we continue to guide our landlords through changes that affect their property and their wider position, ensuring everything is handled in a clear and considered way.

For more details and to access the government’s interactive MTD tool, visit HMRC's guidance on MTD.