HMRC is changing how landlords report income and expenses. Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is coming. This new system affects many landlords from April 2026. Are you ready for these changes?
MTD for Landlords: What You Need to Know
MTD for ITSA requires landlords to keep digital records. You will also need MTD-compatible software. Quarterly updates to HMRC will become mandatory. This means new compliance obligations for you. Your interaction with HMRC will change significantly.
MTD Start Date 1: April 6, 2026
From April 6, 2026, MTD for ITSA applies to some landlords. This includes unincorporated landlords and sole traders. The trigger is a total income of £50,000 or more. This income includes both property and trading income. Ignore any rental income from property companies.
Consider this: rental income of £10,000 plus trading income of £45,000 means MTD applies. However, £49,000 in rental income alone means a later start date. HMRC will look at your 2024/25 Self Assessment tax return. This return is due by January 31, 2026.
Landlords with an April 2026 start date must prepare now. Understand how MTD for ITSA will affect you. Ensure you are ready to comply by April 6, 2026. Once you are in MTD, you stay in. This applies even if your income drops below the threshold. You only exit if your income stays below for three tax years.
MTD Start Date 2: April 6, 2027
More landlords will join MTD for ITSA from April 6, 2027. This includes those with rental and/or trading income of £30,000 or more. This applies to unincorporated property businesses.
What About Other Landlords?
The government plans to include more landlords in MTD for ITSA. This will affect those with income of £20,000 or more. This should happen by the end of the current Parliament. A specific date is not yet set for those below this level. Stay updated for future announcements.
Your New Obligations Under MTD
Currently, you report taxable profits annually. This is via the property pages of your Self Assessment return. The deadline is January 31st. You must keep income and expense records. The format of these records is flexible.
MTD for ITSA changes this process. You must keep digital records of your income and expenses. Use MTD-compatible software for this. You will send simple quarterly summaries to HMRC.
The standard tax quarters end on:
- July 5th
- October 5th
- January 5th
- April 5th
You can choose to report by calendar quarters instead:
- June 30th
- September 30th
- December 31st
- March 31st
HMRC provides a list of compatible commercial software. They will also offer free software for simpler tax affairs. Explore these options to find the best fit for you. Visit our page on Understanding Accounting Software for more information.
After your final quarterly update, you make an end-of-period statement. This finalises your income tax position for the year. It is similar to the current tax return. Here, you claim reliefs and allowances. You also include other income not in MTD. This includes savings, investments, and employment income. You will declare that your information is complete and correct. This is the same as the current Self Assessment process.
The way you pay your tax will not change under MTD for ITSA. Only the way you report your income is changing.
Prepare for MTD Now!
Don’t wait until the last minute. Start preparing for MTD for ITSA today. Understand the new requirements. Choose suitable MTD-compatible software. Begin keeping digital records. This proactive approach will ensure a smooth transition. Explore our resources on Digital Record Keeping for Landlords for guidance.
How I Hate numbers Can Help
Navigating these changes can feel overwhelming. i hate numbers is here to support you. Our services can help you:
- Understand your obligations.
- Choose the right MTD-compatible software.
- Implement efficient digital record-keeping processes.
- Ensure timely and accurate quarterly submissions.
- Prepare your end-of-period statement.
We can simplify the complexities of MTD for Income Tax . Let us help you make this transition as smooth as possible. Visit our MTD for Landlords Services page to learn more.
Don’t Delay – Act Today!
The deadlines for MTD for ITSA are approaching. Ensure you are prepared for these significant changes. Proactive planning is key to compliance. Avoid potential penalties and stress. Take control of your tax obligations now. Read our blog post on Avoiding Tax Penalties for Landlords for valuable tips.
Book a Call Today!
Do you have questions about MTD for ITSA? Are you unsure how it will affect your property business? Our expert team at i hate numbers is here to help. We can provide tailored advice and support. Don’t navigate these changes alone.
Book a call with us today for a free consultation! Let us help you understand MTD and prepare for the future of tax reporting. Click here to Book Your Free MTD Consultation. We look forward to helping you!
Plan It, Do It & PROFIT!