The roll out of HMRC’s Making Tax Digital (MTD) to Income Tax Self Assessment marks a major change for landlords. While the principles of the scheme are simple, the specific requirements can be a little daunting. Overall, MTD aims to get rid of paper tax records, help track income tax due, avoid mistakes and make those that do happen easier to fix. 

In practice, it aims to achieve these goals through two principal means: digital record-keeping and quarterly submission of income tax information to HMRC. 

With the countdown clock ticking to only 18 months away, April 2026, landlords across the UK need to start preparing. Whether you manage a portfolio of properties or a single rental, if you generate untaxed income over £30,000 per year, the shift to digital record keeping is going to shake things up. The big question: Are you ready for the digital leap, or will outdated tax preparation hold you back?

In this article, we cut through the jargon and dive straight into how MTD will impact landlords, offering fresh insights and practical steps to ensure your business is prepared. 

From Paper to Pixels

For the majority of landlords, the days of paper receipts and manual bookkeeping are numbered. Under MTD, all records must be kept digitally – this means data for any income and expenses must be logged on a HMRC-approved software tool. For those that already keep electronic records, in a spreadsheet for example, all data needs to be digitally linked.

A digital link occurs when data is transferred from one piece of software to another, without manual intervention; such as a spreadsheet linking to an accounting application, or when moving data between one location and another; from you, to your accountant, or to HMRC. It also exists when formulas are used in spreadsheets to make calculations. Where digital links exist, numbers or data fields must not be changed as it breaks the link.

While these new requirements can seem challenging, the change presents landlords with the opportunity to really get a handle on their financial position as digital record keeping provides far more powerful, and real-time, insight into financial health. 

Implementing MTD compliant software now will mean all the details of your income and expenses will already be uploaded and categorised securely in the cloud, ready to be pulled into your personal HMRC digital account. 

Automate to Elevate

MTD also changes when landlords will have to submit a return. In this case, there is a move away from submitting once a year, no later 31st January after the previous tax year end, and landlords will now have to make additional quarterly submissions within the tax year.

Quarterly tax submissions might sound like a burden, but with the right software, it’s a chance to streamline your finances. Some software tools have excellent functionality that estimates your income tax liability, for example. This is a great way of avoiding unwanted surprises at the end of the tax year, improving budgeting and easing cash flow pressures. It is worth noting that while the requirement to submit is moving to quarterly, there will be no changes to the timing of the payments due to HMRC.

Using digital software also means that the tax return itself is more likely to be accurate, reducing the chance of overpaying or being contacted by HMRC about underpayments later down the line.

Penalty Free Taxes

Late submissions and errors often come with penalties. However, HMRC has introduced a soft landing period for the initial years of MTD for Income Tax, meaning penalties for non compliance will be relaxed to allow landlords to adjust to the new system. 

But by adopting digital systems early, landlords can stay ahead of the curve and avoid unnecessary fines later down the line. Implementing the right technology can not only help you meet tax deadlines but also optimise your tax strategy, giving you more control over your income and planning.

Navigating Multiple Property Income under MTD for Income Tax 

There remains some need for clarity around how HMRC will handle income from those that rent out more than one property alone or jointly. While this is still being ironed out, landlords should not wait to begin preparations. 

Getting MTD-compatible accounting software now will avoid extra work down the line. MTD software can track all transactions throughout the year, making the next tax return less of a headache. Leaving it until the last minute means retrospectively importing data, creating extra work at an already stressful time.

Change is always a challenge, but MTD should be seen as a positive change, especially for landlords. Ultimately, MTD will put an end to manual submissions, meaning fewer mistakes and time saved, while also giving landlords an insight into their finances. Having a single picture of liabilities and entitlements through a personal tax file means a better understanding of the future picture. 

With landlords being squeezed by higher taxes and fewer reliefs, this sort of financial clarity could be worth its weight in gold when evaluating the future viability, and likely return, from property assets. 

• Pauline Green is Head of Product Compliance & Programs at Intuit QuickBooks *