Making Tax Digital (MTD) is often described as a reporting change. In reality, it marks a wider shift in how landlords interact with the tax system and how rental income is monitored over time.
From April 2026, the first group of landlords will move into the new framework. For others, the changes will follow soon after. For portfolio landlords and long-term investors, the key question is not simply when MTD applies, but how it reshapes reporting expectations going forward.
At Belvoir, we work with landlords across the UK, from single-property owners to large portfolios. This update looks at Making Tax Digital through a broader lens: what it changes, who it affects first, and why it matters for landlords planning.
April 2026 is the starting point, not the end point
The initial rollout of Making Tax Digital for Income Tax begins on 6 April 2026.
From this date, landlords with qualifying income over £50,000 from property and/or self-employment will be required to follow the new digital reporting process. HMRC has confirmed that this threshold will reduce in later years:
- April 2027: income over £30,000
- April 2028: income over £20,000 (subject to legislation)
This phased approach means that while not all landlords are affected immediately, MTD will become standard practice for a growing proportion of the market.
For investors, this signals a permanent shift rather than a temporary compliance change.
A move towards more visible rental income data
Under the current system, rental income is typically reviewed once a year through Self Assessment. Making Tax Digital introduces a different rhythm.
Landlords within scope will be required to keep digital records and submit summary updates to HMRC during the tax year using compatible software. These updates are not tax calculations, but they do give HMRC a more regular view of income and expenses.
Over time, this creates a clearer, more continuous data trail for rental income. For landlords managing multiple properties or income streams, this places greater importance on consistency, accuracy, and record-keeping throughout the year.
What counts towards the income threshold?
The thresholds for Making Tax Digital are based on qualifying income, which is measured before expenses are deducted.
For landlords, this includes gross rental income and, where applicable, self-employment income. This means some landlords may reach the threshold earlier than expected, particularly those with multiple properties or mixed income sources.
Properties held within limited companies are not included under these Income Tax rules, as companies follow Corporation Tax reporting requirements instead.
Reporting more often does not mean paying tax more often
One concern landlords often raise is whether Making Tax Digital changes when tax is due.
It does not.
While income information will be submitted more regularly, the tax payment deadline remains unchanged. Income Tax will still be due by 31 January following the end of the tax year, after landlords have completed an end-of-year submission confirming final figures.
The change is in how information is shared, not when tax is paid.
Software, systems, and scale
HMRC will not provide its own software for Making Tax Digital. Landlords will need to use commercial MTD-compatible software to maintain records and submit updates.
For larger portfolios, this raises practical questions around scalability, integration, and ongoing management. Some landlords may handle reporting directly, while others may rely on accountants or advisers to manage submissions on their behalf.
The most important factor is ensuring systems are fit for purpose before MTD becomes mandatory.
Why early planning matters for landlords
Although April 2026 may feel some distance away, Making Tax Digital rewards preparation.
Landlords who already maintain clear, consistent records are likely to find the transition more straightforward. Those relying on manual processes or end-of-year consolidation may need more time to adapt.
From an investor perspective, MTD reinforces the importance of treating rental income reporting as an ongoing process rather than an annual task.
A national perspective on a national change
Making Tax Digital represents a long-term change in how rental income is reported across the UK. As thresholds reduce, more landlords will move into the system, and digital reporting will become the norm rather than the exception.
Belvoir supports landlords nationwide with professional property management, clear rental reporting, and insight into how regulatory changes affect the rental market. If you would like to discuss how Making Tax Digital may affect your portfolio or plans, speak to your local Belvoir expert.
