What Are The Making Tax Digital Rules For Landlords?

The first phase of Making Tax Digital for Income Tax came into effect on 6 April 2026, and landlords will have to start submitting quarterly reports to HMRC. Central London landlords may need to adopt Making Tax Digital (MTD) rules sooner rather than later. Here’s why that may be the case.

Crucially, MTD rules will be rolled out in phases based on your annual turnover, or gross income. Depending on your annual turnover, you will need to start using recognised record-keeping software from the following dates:

• Over £50,000 – 6 April 2026
• Over £30,000 – 6 April 2027
• Over £20,000 – 6 April 2028

According to government figures shared by Landlord Zone, 118,000 people currently generate £50,000 pa from property income alone. A further 141,000 earn a combination of property and self-employment income over the threshold. Other types of income don’t count towards your total for the purposes of Making Tax Digital.

The Office for National Statistics (ONS) estimates the average monthly rent in Westminster at £3,138, while Kensington and Chelsea properties command an average of £3,628 pcm. As a result, Making Tax Digital rules will apply to many central London landlords in the first or second phase.

From the relevant starting date, landlords should use compatible paid or free software to submit quarterly updates to HMRC. You will still need to submit a Self Assessment tax return by 31 January, paying your tax bill by the same date.

HMRC will issue penalties for late submissions under MTD rules for landlords, however, one slip-up may not attract a fine. Instead, you will be issued with points, and only fined once you reach the penalty point threshold.

The government awareness campaign suggests that HMRC will contact you if your turnover reaches a relevant threshold. This will be assessed from your most recent Self Assessment tax return. However, they won’t sign you up to the scheme – only make you aware that you need to prepare.

Of course, this is simply an overview for general information. To ensure you are fully compliant, consult a tax advisor about the Making Tax Digital rules for landlords and how they will affect you.

Read more on Landlord Zone and find official guidance on Making Tax Digital for Income Tax here.