While the system aims to simplify compliance and reduce errors, many landlords are still unsure of what MTD means for them — especially as the Income Tax Self-Assessment (ITSA) rules continue to evolve.
In this guide, Persona Finance explains what MTD for landlords is, who it applies to, when it will take effect, and how to prepare your property accounts for the upcoming digital tax era.
What Is MTD and How Does It Apply to Landlords?
Making Tax Digital (MTD) is a UK government initiative that requires individuals and businesses to maintain digital accounting records and file tax submissions electronically through MTD-compatible software.For landlords, MTD applies mainly to Income Tax (for property income) and, in some cases, VAT if you are registered due to furnished holiday letting or commercial property activities.
What is MTD for landlords?
MTD for landlords means using approved digital software to record rental income and expenses, then submitting quarterly updates and an annual return to HMRC online — replacing traditional paper or manual submissions.
Who Must Comply and When
The rollout of MTD is happening in stages.At present, landlords earning more than £50,000 per year from property income will need to join the MTD for Income Tax (MTD ITSA) system from April 2026.
A second stage will follow in April 2027 for landlords with property income exceeding £30,000 per year.
If you earn below that threshold, you can continue using the current Self-Assessment system for now, though digital record-keeping is strongly recommended.
Do limited company landlords need to use MTD?
Not yet. Company landlords are covered under the separate Making Tax Digital for Corporation Tax, which is still in the pilot phase.
How Landlords Can Prepare for MTD
Getting ready for MTD early is the best way to ensure a smooth transition.Digitalising your property records will not only make compliance easier but also give you better insight into your business performance.
Steps to prepare:
- Adopt MTD-compatible software. Use approved accounting platforms that can connect directly with HMRC.
- Keep all rental income and expenses digitally. Avoid paper ledgers and non-integrated spreadsheets.
- Record transactions per property. HMRC expects clarity between individual rental units and joint ownerships.
- Reconcile quarterly. Once MTD ITSA is fully operational, landlords must submit updates every three months.
- Seek professional help. Partner with a firm like Persona Finance to ensure compliance and efficient system setup.
Can I use Excel spreadsheets for MTD?
Yes — but only if linked to HMRC via bridging software that securely transmits your data. However, using full MTD-compliant software is usually more efficient.
Benefits and Challenges of MTD for Landlords
Benefits:
- Accuracy and transparency. Reduces manual errors and late submissions.
- Real-time insights. Digital tools show your rental profits and tax due in real time.
- Simplified reporting. Quarterly submissions prevent last-minute rushes at year-end.
- Easier record-keeping. All income, expenses, and receipts are stored securely online.
Challenges:
- Initial setup costs. Some landlords need new accounting software or training.
- Adjustment period. Those used to spreadsheets may find digital platforms unfamiliar.
- Quarterly updates. Reporting four times a year requires consistent record-keeping discipline.
Is MTD worth it for landlords?
Yes. Although the transition takes effort, MTD makes financial management easier, ensures compliance, and provides better long-term control of property finances.
Common Questions About MTD for Landlords
Do I need to use accounting software for MTD?Yes. You must keep records digitally and use HMRC-approved software for submissions.
What if I own multiple properties?
Each property’s income and expenses must be recorded separately but reported together through your digital software.
How are joint ownerships handled?
Each co-owner is individually responsible for reporting their share of rental income and costs under MTD.
What about overseas landlords?
If you are a non-resident with UK property income above the MTD threshold, you must still comply, even if you file through an agent.
Are furnished holiday lets included?
Yes. These count as property income and must be included in digital reporting if your total rental income exceeds the threshold.
What happens if I miss a submission?
HMRC can apply penalties for late filings or inaccurate updates. MTD aims to encourage timely and consistent reporting.
How Persona Finance Supports Landlords
Transitioning to Making Tax Digital can seem daunting, especially for landlords managing multiple properties or mixed portfolios. That is where Persona Finance can make the difference.Our team helps you:
- Choose and implement MTD-compatible software.
- Migrate existing accounting records safely into digital format.
- File quarterly updates and final declarations to HMRC.
- Manage property-specific accounting, including joint ownership and furnished holiday lets.
- Stay compliant with deadlines and avoid penalties.
👉 Book a consultation to make your property business MTD-ready with professional support from Persona Finance.
Final Thoughts
Making Tax Digital for landlords is not just a compliance update — it represents a long-term change in how property owners manage their financial records. By acting now, you can avoid last-minute stress, gain better control of your cash flow, and enjoy greater accuracy in your tax reporting.With Persona Finance, landlords can simplify every stage of digital tax transformation — from choosing the right software to filing compliant quarterly submissions.
Stay ahead of the 2026 MTD deadline and make the transition seamless with expert guidance.
