Making Tax Digital, commonly known as MTD, is one of the biggest changes to the UK self-assessment system since the late 1990s.

For landlords and self-employed individuals, it means moving towards digital record keeping and submitting regular updates to HMRC through compatible software.

In a recent Lendlord webinar, Aviram Shahar of Lendlord, Craig Ogilvie, HMRC Director of Making Tax Digital, and Kevin Sefton of Untied explained why MTD is being introduced, who will need to comply and how landlords can submit quarterly updates using the Lendlord MTD Hub.

Inside Making Tax Digital with HMRC’s Director & Lendlord Hub Demo 

Why HMRC Is Introducing MTD

According to Craig Ogilvie, the purpose of MTD is to modernise the tax system and reduce the tax gap.

The current self-assessment system still relies on infrastructure designed in the 1990s. MTD is intended to create a more resilient system that works with modern accounting and property management software.

HMRC also believes digital record keeping will reduce genuine tax errors. A significant part of the tax gap among small businesses and individual taxpayers comes from mistakes, often described by HMRC as a failure to take reasonable care.

By requiring taxpayers to keep records digitally and update them regularly, HMRC expects fewer errors, more accurate information and a smoother end-of-year process.

Nearly 500,000 people have already signed up for MTD, and more than 115,000 quarterly updates have been submitted.

MTD Deadlines and Income Thresholds

MTD is being introduced in phases based on gross qualifying income before expenses.

From April 2026, landlords and self-employed individuals must join if their gross qualifying income for the 2024/25 tax year was more than £50,000.

Fewer than 900,000 people are expected to fall within the initial 2026/27 mandate.

From April 2027, the income threshold will fall to £30,000.

From April 2028, it will reduce again to £20,000.

Affected taxpayers must use compatible software to keep digital records and submit quarterly updates.

The quarterly deadlines are:

• 7 August
• 7 November
• 7 February
• 7 May

Exemptions may be available for people who cannot reasonably participate because of disability, religion or geographical circumstances. HMRC considers these cases individually.

Quarterly Updates Are Not Tax Returns

One of the most important points raised during the webinar was that a quarterly update is not the same as a tax return.

It is not a final statutory declaration confirming that every figure is complete and perfect. It is simply a summary of the digital records held at that stage of the tax year.

HMRC has also confirmed that there will be no penalties for late quarterly updates during the 2026/27 tax year.

The first year is intended to give taxpayers and software providers time to adapt. HMRC expects some practical issues and will focus on resolving them rather than immediately penalising users.

Quarterly updates are submitted on a year-to-date basis.

This means that if a landlord makes an error in the first quarter, the record can be corrected and the updated figure will be included in the next submission.

There is no need to treat each quarterly update as permanently fixed.

Taxpayers can also submit updates more frequently if they choose.

Quarterly reporting covers property income and self-employment income. Other information, including PAYE income, pensions, bank interest and charitable donations, is dealt with during the end-of-year process.

HMRC may automatically import PAYE and pension information it already holds.

Who Must Comply?

Landlords, your first quarterly submission deadline is 7 August 

The current MTD rollout applies to individuals and sole traders.

It does not apply to limited companies.

Non-resident landlords have also been deferred from the 2026/27 rollout, although they are expected to be included later.

Formal tax partnerships that file an SA800 partnership return are currently outside the scope of MTD.

However, joint property owners who informally describe themselves as partners may still need to comply individually.

For joint owners, the MTD threshold is based on each person’s share of the gross income, not the total income produced by the property.

For example, if a jointly owned property generates £80,000 a year and each owner has a 50 percent share, each person would report £40,000.

Both owners would therefore remain below the initial £50,000 threshold, although they could choose to join voluntarily.

The £90,000 Reporting Threshold

Kevin Sefton also highlighted an important rule about expense reporting.

If gross property income is below £90,000, landlords can use simplified reporting and group income and expenses into overall totals.

If gross income exceeds £90,000, expenses must be separated into specific digital categories, such as maintenance and other property costs.

Lendlord can automatically categorise transactions based on the information entered or imported into the platform.

Digital Records and Receipts

Landlords must keep digital records of transactions, including the date, amount and relevant category.

However, HMRC does not receive copies of individual receipts or invoices through quarterly updates. The software submits the relevant financial totals.

Landlords must still retain receipts and supporting documents in case HMRC carries out an inspection or opens an enquiry.

Receipts can be stored physically or digitally.

Aviram recommended attaching digital receipts directly to transactions inside Lendlord. This creates a clear audit trail and helps landlords keep records organised across multiple properties.

Using the Lendlord MTD Hub

Landlord’s MTD Hub

Lendlord has developed an HMRC-recognised MTD Hub for quarterly submissions.

The first step is to register for MTD directly with HMRC and add the relevant income sources, such as UK property income, foreign property income or self-employment income.

Connecting software before completing HMRC registration may cause errors.

Landlords must then confirm the correct ownership percentage for each property. 

Landlords confirming ownership via Lendlord MTD Hub.

Joint owners only report their personal share of income and expenses.

Once the ownership split is entered, Lendlord can calculate the correct proportion.

Users then authorise Lendlord to connect to their HMRC account and submit quarterly updates.

Before submitting, landlords reconcile their bank transactions manually or through open banking, review the income and expense summary and click submit.

The MTD Hub is included in Lendlord’s premium plan, alongside the Compliance Hub, which supports landlords with wider regulatory changes, including the Renters’ Rights Act.

What Landlords Should Do Now

MTD is a major administrative change, but landlords should not view it as four full tax returns every year.

The main requirement is to keep accurate digital records and submit regular year-to-date summaries.

Landlords should check their income threshold, register with HMRC at the right time, confirm property ownership percentages and use compatible software to organise income and expenses.

By using Lendlord for digital records and quarterly updates, landlords can reduce administration and remain compliant with HMRC’s move towards digital tax reporting.