Making Tax Digital for Landlords

Who needs to use it

You need to check Making Tax Digital for Income Tax if you are an individual registered for Self Assessment, receive property or sole-trade income, and your qualifying income is over the threshold for the relevant year. Qualifying income is broadly gross income from those sources before expenses, not the taxable profit.

HMRC may write to confirm a start date, but the official guidance says it remains your responsibility to check. Jointly owned property, non-resident status, multiple income sources and changes in ownership can affect the calculation or reporting setup.

What changes in practice

Someone in scope must use compatible software to create and keep digital records of property and self-employment income and expenses, send quarterly updates and complete the tax-return process. A spreadsheet may form part of the system only if compatible bridging or submission software creates the required digital links.

Quarterly updates are summaries, not four extra tax bills. You still need to review the year, include other income and gains as required, submit the return and pay tax by the applicable deadline.

Preparation checklist

1. Check the relevant Self Assessment return and calculate qualifying income before expenses.
2. Use HMRC’s checker to confirm the start date and whether an exemption may apply.
3. Choose compatible software that can handle the number and ownership of your properties.
4. Agree responsibilities and authorisation with an accountant or tax agent.
5. Create a clean digital record for rent, expenses, finance costs, capital items and adjustments.
6. Sign up and authorise the software; do not assume existing Self Assessment registration completes this step.
7. Reconcile each quarterly update to bank and property records and retain supporting evidence.

Exemptions and penalties

Some people may qualify for a permanent or temporary exemption, including on digital-exclusion grounds, but an exemption should not be assumed. Use HMRC’s current application guidance. HMRC has also published a specific penalty framework; the treatment of quarterly updates in the first mandatory year should be checked against the live guidance rather than an old summary.

Official HMRC sources

• Check if and when you need Making Tax Digital for Income Tax
• Sign up for Making Tax Digital for Income Tax
• Choose compatible software
• Apply for an exemption