New statistics released by HMRC show an estimated 118,000 landlords and 3,000 sole traders working in real estate across the UK will be required to use MTD for the 2026 to 2027 tax year. Another 4,000 work in the real estate sector and are also landlords.
For most, the first quarterly update under MTD for Income Tax will cover the period from 6 April to 5 July 2026 and will need to be submitted by 7 August 2026.
About 100,000 sole traders and landlords have already signed up, with more than 15,000 quarterly updates successfully submitted through a voluntary testing programme.
What is Making Tax Digital?
Switching to MTD means using compatible software to keep digital records, sending four simple quarterly updates of income and expenses, and submitting an annual tax return to HMRC.
Free software options are available, with a range of paid packages also on offer to suit different needs. Once all your digital records of income and expenses have been created, the software will use them to generate your quarterly update.
Those joining MTD for Income Tax in April 2026 will still file their Self-Assessment return for the 2025 to 2026 tax year in the usual way by 31 January 2027. The first tax return that most customers will submit using their MTD compatible software, covering 2026 to 2027, will be due by 31 January 2028.
New penalties for missed deadlines
MTD introduces a points-based system for late submissions, which applies where a £200 fine is only triggered once four points are reached, meaning the occasional slip-up will not result in an immediate fine. No penalty points will be issued for late quarterly updates for the 2026 to 2027 tax year – though points will still apply to late tax returns.
What to do now
Craig Ogilvie, HMRC's Director of Making Tax Digital, stated that MTD for Income Tax is a generational change, and support is there for everyone who needs it.
People with a tax agent should speak to them about preparing. HMRC's research shows awareness among the agent community is 99.6%, and agents represent around two-thirds of the customers in scope for MTD for 2026 to 2027.
HMRC is urging anyone else in scope of MTD for Income Tax to act now: read the guidance, choose software and sign up on GOV.UK. Those who genuinely cannot use digital tools can apply for an exemption.
Resources to support members
Our dedicated Knowledge Hub page gathers all the key dates, information, and links agents need to understand MTD, how it impacts them and their clients, and whet they need to do.
Additionally, members can register for our exclusive webinar on 27 April, as Propertymark and HMRC will explore how the making tax digital changes will impact landlords and agents across the UK.
