What changes
The return does not go away, it just stops being the only event
Making Tax Digital for Income Tax replaces one annual exercise with a running one. Property income and expenses have to be kept digitally in compatible software, a summary goes to HMRC every quarter, and after the year end a final declaration brings everything together and settles the tax.
Nothing changes about how much tax you pay or when you pay it. What changes is that records can no longer be a folder of statements retyped into a spreadsheet the following January. They have to exist in software through the year, which is a real change of habit for a lot of landlords.
It started on 6 April 2026 for the largest group and widens twice more. Our MTD for Income Tax service page covers the scheme as a whole, and the MTD checker will tell you your own start date.
What it means in practice
- Digital records in compatible software
- A summary to HMRC every quarter
- A final declaration after the year end
- Records kept per property
- Same tax, same payment dates
- Spreadsheets retyped at the year end are not enough
Who is affected
It turns on qualifying income, not on how many properties you own
Landlords letting residential property
Buy to let, HMOs and long lets held in your own name or jointly. Property held through a limited company is outside this entirely, because a company pays Corporation Tax and files differently.
Landlords with short lets
Holiday lets and serviced accommodation count as property income. The furnished holiday lettings rules have ended, so these sit with the rest of your property income for the qualifying income test.
Landlords who also trade
Gross rents and gross self employment turnover are added together. A landlord with £14,000 of rent and £9,000 of freelance turnover has £23,000 of qualifying income, so the trading side can be what brings you in.
Landlords with overseas property
If you were UK resident, foreign property income counts alongside UK property income. Non residents are treated differently and foreign property income is left out.
Qualifying income
Gross, combined, and tested on a return you have already filed
Qualifying income is turnover and rents before any expenses. HMRC checks it against your Self Assessment return for an earlier year, so your start date is set by figures you have already reported.
QIThresholds and start dates
The return HMRC tests, and the date you join.
| Over £50,000 on the 2024 to 2025 return | 6 April 2026 |
| Over £30,000 on the 2025 to 2026 return | 6 April 2027 |
| Over £20,000 on the 2026 to 2027 return | 6 April 2028 |
Partnerships will be brought in at a later date which has not yet been set.
CTWhat counts
Added together, before expenses.
| Gross rents from UK property | Counts |
| Your share of jointly held property | Counts |
| Foreign property income, if UK resident | Counts |
| Gross self employment turnover | Counts |
| Employment income under PAYE | Does not count |
| Pensions and dividends | Does not count |
| Your share of a partnership profit | Does not count |
Rent a room income and income within the £1,000 property allowance still form part of gross property income, so check the gross figure rather than the taxable one.
The three stages
April 2026, April 2027 and April 2028
Over £50,000
The first group is already in. Qualifying income above £50,000 on the 2024 to 2025 return means digital records from 6 April 2026, with the first quarterly update due by 7 August 2026 and the rest on 7 November, 7 February and 7 May. There are no penalties for missed quarterly updates in this first year.
Over £30,000
The threshold falls to £30,000, tested on the 2025 to 2026 return, which is the return due by 31 January 2027. That brings in a large number of landlords with two or three properties, and the figures that decide it are the ones you are reporting this coming January.
Over £20,000
The threshold falls again to £20,000, tested on the 2026 to 2027 return. At that level a single well let property, or a smaller one combined with some freelance work, is enough to bring a landlord in.
Digital records and quarterly updates
What you actually have to do each quarter
Records have to be kept digitally as income and expenses arise, in software that can talk to HMRC. For a landlord that normally means a bank feed from the account the rent arrives in, agent statements entered as they come, and receipts captured on a phone rather than kept in a drawer. Each property is recorded separately, because the quarterly update is built from the property business as a whole but you still need to know which property a cost belongs to.
The quarterly update itself is a cumulative summary of income and expenses by category. Deadlines fall on 7 August, 7 November, 7 February and 7 May. It is not a tax calculation, it does not have to be perfect, and later updates correct earlier ones.
After the year end comes the final declaration, which is where the real work sits. Reliefs are applied, the finance cost credit is calculated, any other income is added and the tax is worked out. That replaces the Self Assessment return and is due by the same date, 31 January.
The quarterly cycle
- Quarter to 5 July, due 7 August
- Quarter to 5 October, due 7 November
- Quarter to 5 January, due 7 February
- Quarter to 5 April, due 7 May
- Final declaration due 31 January
- Tax still paid on 31 January and 31 July
Jointly owned and multiple sources
Where it gets fiddly
Jointly held property is the question we are asked most. Only your share of the income counts towards your qualifying income, and each owner keeps their own records and sends their own updates. There is a relaxation on the expenses side for jointly held property, so the detail does not have to be duplicated in every quarter, and where you are only notified of your share net of costs HMRC works from that net figure.
Spouses who hold property jointly are treated as owning it equally for tax unless the beneficial ownership is different and a declaration has been made, so the split of income is worth checking before it is locked into quarterly reporting.
Landlords with more than one source need a little planning. Property and self employment are separate businesses for reporting, so a landlord who also trades sends an update for each, from the same software, by the same deadline. Rent from a UK property and rent from an overseas one are also reported separately.
How we handle it
- A record per property, from the start
- Both owners set up together
- Simplified expenses reporting for joint property
- Separate updates for property and for trade
- Joint Landlords package covers both owners
- Beneficial ownership checked before we begin
How we help
Set up once, then it runs
We sign you up with HMRC, choose and set up compatible software, connect the bank account the rent comes into and build a record for each property. If your records are currently a spreadsheet or a shoebox, we rebuild the opening position first and agree it with you.
From then on the quarterly update is prepared from your records, sent to you to confirm and filed. After the year end we prepare the final declaration, apply the reliefs and tell you what is due and when. It is one fixed monthly fee covering all of it, with no separate charge per update and no annual bill in January.
The Landlord package is £35 a month for up to three properties held personally, with £5 a month for each additional property. Joint Landlords is £55 a month and covers both owners and both returns. Property held in a company sits under Property Company at £119 a month.
Included in the fee
- Signing you up with HMRC
- Compatible software and receipt capture
- A record built per property
- All four quarterly updates
- The final declaration and your return
- Unlimited email support
Questions
Frequently asked
I have one rental property. Does this apply to me?
Only if your qualifying income is above the threshold for the year being tested. Qualifying income is gross rent plus any gross self employment turnover, before expenses. One property producing modest rent and no other trading income will usually fall below the £20,000 figure that applies from April 2028, but not always.
Do I pay tax four times a year now?
No. Quarterly updates are a summary of income and expenses sent to HMRC for information. The tax is still worked out once, after the year end, and paid on the same dates as now.
How does jointly owned property work?
Only your share of the property income counts towards your qualifying income. If a jointly held property produces £50,000 and you take half, your qualifying income from it is £25,000. Where you are only told your share after expenses have been taken off, HMRC assesses that net figure instead. Each owner reports their own share.
What if I also have a job or a pension?
Employment income under PAYE, pensions, dividends and your share of a partnership profit do not count towards qualifying income, even though they still go on your tax return. Only self employment and property income are counted.
Can I be exempt?
There are exemptions, including for people who are digitally excluded. Anyone exempt still has to report their income on a Self Assessment return in the usual way. We can look at whether you qualify and apply on your behalf.
What happens if an update is late?
Late submission works on points. A point is given for each missed deadline, a £200 penalty applies once you reach four points, and each further miss adds another £200. There are no penalties for missed quarterly updates in the 2026 to 2027 tax year. Late payment penalties are separate and are charged as a percentage of the tax outstanding.
Related
Worth reading next
Making Tax Digital for landlords: complete UK guide
Eligibility, qualifying income, joint ownership, digital records and software.
Read moreServiceMTD for Income Tax
The scheme as a whole, for sole traders as well as landlords.
Read moreSectorProperty and landlords
How we work with landlords, from a first buy to let to a company held portfolio.
Read moreFind out when it starts for you
Book a free 30 minute call. We will work out your qualifying income, tell you your start date and set the records up before you need them.
Or just pick up the phone
+44 7456 385980info@taxmesh.co.uk
