Which landlords are in
Making Tax Digital for Income Tax applies to individuals whose qualifying income is over the threshold. For landlords that means rent received before any costs are taken off, added to any self-employment turnover. Over £30,000 on your 2025 to 2026 tax return means you start on 6 April 2027. Over £20,000 on your 2026 to 2027 return means 6 April 2028. Wages, pensions and dividends are not counted.
Two points catch landlords out. First, the test is on gross rent: a landlord collecting £32,000 a year is over £30,000 even if mortgage interest and repairs leave little profit. Second, for UK residents, overseas property counts as well as UK property. If you own property through a limited company, the company is outside MTD for Income Tax altogether; its rent is taxed through corporation tax.
What MTD changes for a landlord
The change is mainly about timing and format. Instead of gathering a year of rent and receipts once a year, you keep digital records as you go and send HMRC a summary every quarter: by 7 August, 7 November, 7 February and 7 May. UK property is one income source and overseas property another, each with its own updates. After the year ends you make a final declaration, which is where allowances, reliefs and finance cost restrictions are settled and your tax bill is worked out.
For a landlord with one property let through an agent, that can be little more than entering the agent’s monthly statement into software. For someone with several properties, joint owners and a mix of repairs, improvements and finance costs, the quarterly discipline is real work.
Six landlord situations, and what usually suits them
One property, let through an agent
The agent’s monthly statements already list rent and costs. Many landlords enter these into simple software themselves and pay for a year-end check.
Two or three properties, managed yourself
More transactions and more chance of a mixed-up expense. A bookkeeping app with a bank feed, or a firm doing the updates, saves time.
Property owned jointly
Only your share counts. For spouses and civil partners the split is equal unless HMRC has been told otherwise. Worth an accountant’s view before the first update.
Rent plus a business
Two income sources, two sets of records, one threshold. The combination is where people most often cross the line without expecting to.
UK and overseas property
Overseas property is a separate income source with its own records, and foreign tax may need taking into account at the year end.
Properties bought or sold this year
Part-year income, purchase and sale costs, and possibly capital gains. Usually a job for an accountant.
When an accountant pays for itself
Landlords tend to get the most value from an accountant in four areas.
- Working out whether you are in. Joint ownership, a business on the side and foreign property all change the qualifying income figure. A short check before April can save you buying software you do not need, or stop you missing a start date you do have.
- Repairs versus improvements. A repair is an expense against rent; an improvement generally is not. Getting this wrong each quarter means correcting it at the year end.
- Finance costs. Mortgage interest for residential lets is not deducted like other expenses but given as a tax reduction. It is a common source of errors in DIY returns.
- Years with change. Buying, selling, refinancing or moving a property between owners all have tax consequences that reach beyond the quarterly updates.
Working with your letting agent
If an agent manages your properties, their statements are the backbone of your records. Ask whether they can give you statements by the tax quarter, in a format your software or your accountant can import. A few agents can also act as your agent with HMRC, but most leave that to the landlord or an accountant. Whoever sends the updates, you remain responsible for what is submitted in your name.
What to ask an accountant as a landlord
- Do you send quarterly updates for property income, not just for businesses?
- How do you handle joint ownership and the 50:50 rule for spouses?
- Can you work from my letting agent’s statements?
- Which software do you use for landlords, and who pays for it?
- Is the fee per property, or one price for all of them?
For how firms price the work, see MTD accountant fees. To compare firms that take landlords, tell us about your properties through the form and we will match you with up to four.