Making Tax Digital for Landlords: What’s Changing and How to Prepare

The introduction of Making Tax Digital (MTD) for Income Tax represents a fundamental shift from annual reporting to a more frequent, digital-first system.

What is Making Tax Digital?
Making Tax Digital is the Government’s initiative to modernise the UK tax system. For landlords, it will replace the traditional annual Self-Assessment return with a system of digital record-keeping and quarterly reporting.

Who does it apply to?
From April 2026, MTD will apply to landlords with:

  • Annual rental income over £50,000

From April 2027, this threshold will reduce to:

  • Annual rental income over £30,000

Whilst this is not applicable to entities, it is relevant to landlords who are both UK and non-UK residents. This means a large proportion of landlords will fall within scope over the coming years.

What will landlords need to do?

Under Making Tax Digital, landlords will be required to:

  • Keep digital records of income and expenses

  • Submit quarterly updates to HMRC via approved software

  • Complete a final end-of-year declaration

This represents a move away from retrospective reporting towards real-time financial management.

What are the implications?

While the intention is to improve accuracy and transparency, the practical reality is an increase in administrative responsibility.

Landlords will need to:

  • Adopt compatible accounting software

  • Maintain more regular and accurate bookkeeping

  • Engage more actively with their financial reporting

For some, this will require a shift in mindset, as well as process.

Opportunities as well as obligations

There are also potential benefits:

  • Greater visibility of portfolio performance throughout the year

  • Improved financial planning and forecasting

  • Reduced risk of errors at year-end

With the right systems in place, MTD can provide better insight into asset performance.

How Garrington can help

The good news is that our portfolio management and record-keeping are already 100% digital. Meaning that we are well-positioned to share with our clients quarterly statements, exclusively for the purpose of informing quarterly declarations required by the Making Tax Digital initiative.

Whilst tax advice remains the remit of your accountant or tax advisor, we work closely with landlords and their advisers to ensure the operational side of property management aligns with reporting requirements.

This includes:

  • Providing clear, structured income reporting quarterly

  • Supporting accurate record-keeping

  • Coordinating with professional advisers where required

Early preparation will be key to ensuring a smooth transition in alignment with HMRC’s new landlord requirements.