Landlords: Making Tax Digital for Income Tax

What now for Landlords

Making Tax Digital for Income Tax (MTD for IT) will finally begin from 6 April 2026, when it becomes mandatory for landlords and the self-employed whose gross combined is over £50,000 in the tax year to submit quarterly returns to HMRC. The recent Budget brought some important changes in regard to MTD for IT.

Soft landing for MTD for IT

The government has announced that taxpayers joining MTD for IT in April 2026 will not receive penalty points for late submission of their first four quarterly updates. This soft landing will only apply to those in the first year from 6th April 2026 and not those mandated to use MTD for IT from April 2027 and April 2028.

As a reminder taxpayers will still need to submit their quarterly updates before they are able to submit their Self Assessment tax return. This soft landing does not change the Self Assessment tax return late submission penalties which remain unchanged.

Exemptions

The government has announced further deferrals and exemptions from MTD for IT with a one-year deferral for landlords who come within the following tax payers:

• Recipients of trust and estates income
• Taxpayers under a deputyship (as appointed by the Court of Protection) will be permanently exempt from MTD for IT.

Exemptions previously announced are:

• Your age, health condition or disability stops you from using a computer, tablet or smartphone to keep digital records or submit them to HMRC
• You’re a practising member of a religious society or order whose beliefs are incompatible with using digital communications
• You cannot get internet access at your home or business because of your location, and cannot get access at a suitable alternative location
• Taxpayers who use the residence, remittance basis etc. (SA109) pages of the Self Assessment tax return will not be required to use MTD for IT until April 2027.

Qualifying Income

One additional small but important updated guidance is the need for taxpayers to check their qualifying income.

The guidance now states that taxpayers should not wait to receive a letter from HMRC to say they need to comply. Instead, they should check their income to see when they are mandated for MTD for IT.

Similarly, accounting periods that are shorter or longer than 12 months HMRC states for income from property (the Self Assessment tax return will not declare start dates), the impetus is on the taxpayer to calculate their income and sign up if they exceed the £50,000 threshold starting 6 April 2026.

Get In Touch

For more information or advice, contact your local Whitings LLP office today.

Disclaimer - All information in this post was correct at time of writing.