MTD for Income Tax is already required for sole traders and landlords whose qualifying income is over £50,000.
It will apply to those with:
- qualifying income over £30,000 from April 2027
- qualifying income over £20,000 from April 2028
Qualifying income is the combined turnover from self-employment and property before expenses are deducted. Landlords whose 2025–26 tax return shows turnover over £30,000 may therefore need to use MTD from April 2027.
Making Tax Digital
Making Tax Digital for Income Tax is a new way for sole traders and landlords to report their income and expenses to HMRC. Letting agents can undertake this process on behalf of the landlords and help their clients understand the changes.
Second quarterly update due by 7 November
People already using MTD must keep digital records and send updates through compatible software. Quarterly updates summarise income and expenses; they are not tax returns or tax payments. Each update covers the tax year to date, so a correction to earlier records can be included in the latest update without resending the previous one.
Before the November deadline, users should check that their records are up to date, their software is connected to HMRC and the figures it has produced are correct. An update is still required if there was no income or expenditure during the period. HMRC says there will be no penalty points for late quarterly updates during the 2026–27 tax year, but it must receive the updates before a user can submit their tax return.
Anyone required to use MTD this tax year who has not signed up should act now. HMRC says it will begin signing up people who should already be using the system in stages from September 2026. View step-by-step guidance for sole traders and landlords on the UK Government website.
How letting agents can help landlords prepare
Letting agents can raise awareness among landlord clients and direct them to HMRC’s guidance, particularly if a landlord may cross the April 2027 threshold. Agents can also review whether their landlord statements arrive regularly and clearly show rental income, fees, charges, and expenses. This information can help landlords keep accurate digital records.
Landlords preparing for MTD should check whether it applies to them, speak to their accountant or tax agent where they have one, and explore compatible software. Options include software that works with existing spreadsheets. Keeping records up to date throughout the year will make quarterly reporting easier.
Support for agents
Propertymark hosted HMRC for a webinar providing a practical overview explaining the changes, who will be impacted, and how agents can support landlords in preparing for the new system and reporting income to HMRC.
Watch the webinar recording →
HMRC has also published guidance on creating digital records and sending quarterly updates, alongside videos and webinars for people who need further support.
