Making Tax Digital for Landlords: MTD ITSA 2026 Explained
Making Tax Digital for Income Tax Self Assessment is being rolled out for UK landlords. Here is who is affected, when the mandate kicks in, and what you need to do now.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is HMRC's programme to replace the annual Self Assessment tax return with a system of digital record-keeping and quarterly updates submitted through MTD-compatible software.
Landlords with total income from property and/or trading above a threshold will be required to:
- Keep digital records of all income and expenses
- Submit quarterly summary updates to HMRC
- Submit a final end-of-period statement at the end of each tax year
This is a significant change from the current system where most landlords file a single annual Self Assessment return.
When does MTD ITSA apply to landlords?
MTD ITSA is being phased in by income threshold:
| Annual income | Mandation date |
|---|---|
| Over £50,000 | April 2026 |
| Over £30,000 | April 2027 |
| Over £20,000 | April 2028 (proposed) |
| Over £10,000 | Later phase (date TBC) |
"Total income" means total gross property income plus any trading income, before deducting expenses.
What counts as "property income" for MTD purposes?
Property income includes:
- Gross rent received from residential lettings
- Income from furnished holiday lettings (separate MTD rules may apply)
- Ground rent and service charge income from freehold management companies
It does not include:
- Capital gains from property sales
- Savings interest
- Employment income
If your total income from these sources is above the relevant threshold, you must comply from the mandation date for your threshold.
What do landlords need to do?
1. Keep digital records
You must keep digital records of:
- All rental income received (property by property, or as a total depending on your structure)
- All allowable expenses (repairs, management fees, insurance, mortgage interest - subject to the Section 24 restriction - finance costs, etc.)
Records can be kept in MTD-compatible software (there are many on the market), a spreadsheet that connects to bridging software, or an all-in-one property management platform that exports to MTD.
2. Submit quarterly updates
Every 3 months, you must submit a summary of your income and expenses for that quarter to HMRC via MTD-compatible software. These are not tax returns - they are just summaries. You can correct them in the final submission.
Quarterly periods:
- Quarter 1: 6 April to 5 July
- Quarter 2: 6 July to 5 October
- Quarter 3: 6 October to 5 January
- Quarter 4: 6 January to 5 April
Submissions are due by the 5th of the month following the end of the quarter (e.g. Quarter 1 is due 5 August).
3. Submit a final declaration
At the end of the tax year, you submit a final declaration (replacing the current Self Assessment return) confirming that your records are complete and claiming any tax reliefs not included in the quarterly submissions.
What happens if I miss a deadline?
HMRC will issue penalty points for late submissions under MTD. Once you accumulate a certain number of points, a financial penalty is imposed. The exact penalty structure is set out in the Finance Act 2021.
Checking whether MTD applies to you
STEMHQ's free MTD ITSA Eligibility Checker tells you which mandation phase applies to you based on your total property income, so you know your deadline before scrambling to find one. Built-in income and expense tracking with MTD export is on our roadmap, not live in the platform today, so for now keep digital records in whatever MTD-compatible software or spreadsheet you already use, ready to hand to your accountant.
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