Making Tax Digital (MTD) for Income Tax has now taken effect. From 6 April 2026, landlords with gross rental income over £50,000 must maintain digital records and submit quarterly updates to HMRC.
For many landlords, this represents a notable change in how their tax affairs are managed. However, MTD is not solely a compliance requirement. It reflects a broader shift in how HMRC expects rental activity to operate, moving away from informal, year-end reporting towards a more structured, business-led approach.
From ‘accidental landlord’ to property business
Many UK landlords – particularly ‘accidental landlords’ – have traditionally relied on spreadsheets, paper records or basic software, often reviewing their position annually.
MTD changes this dynamic.
The move to digital record-keeping and quarterly reporting encourages more regular engagement with financial data, improving visibility over income, expenditure and cash flow. In practice, this can support more informed decision-making, including:
- Identifying underperforming properties at an earlier stage
- Monitoring rental trends, void periods and arrears
- Assessing options around refinancing, refurbishment or disposal
Joint ownership and the £50,000 threshold
One of the most common areas of uncertainty relates to how the £50,000 income threshold applies in practice, particularly where properties are jointly owned.
For example, where one partner holds additional properties in their sole name, it is possible for:
- One individual’s share of rental income to exceed £50,000 (bringing them within MTD), while
- The other remains below the threshold and outside the regime, at least initially
This can introduce additional complexity. Accounting systems should be configured to reflect ownership accurately, ensuring that only those within scope meet the quarterly reporting requirements.
If not managed carefully, there is an increased risk of misreporting, amended submissions and potential penalties.
Similar considerations apply where family members hold minority interests as part of succession or estate planning. In all cases, clear documentation and robust digital records are key.
What should landlords be doing now?
With the threshold expected to reduce to £20,000 from April 2028, landlords who are currently outside the regime may benefit from preparing in advance.
We recommend focusing on three areas:
- Understand your position
Review total gross rental income across all UK and overseas properties, including jointly owned assets. - Map ownership structures clearly
Ensure clarity over ownership proportions and identify which individuals fall – or are likely to fall – within scope. - Choose appropriate software and advice
Not all accounting software is well suited to landlord portfolios. Working with advisers who understand both MTD and residential property can help reduce risk and improve efficiency.
Turning MTD into an opportunity
MTD is expected to remain a key part of the tax landscape, with its scope likely to expand over time.
While some landlords may view the changes as an additional administrative burden, those who take early steps to implement appropriate systems and processes may be better positioned to enhance both compliance and overall portfolio performance.
Get in touch
If you are a residential landlord and would like to understand how Making Tax Digital may affect you – particularly where properties are jointly owned or form part of a wider portfolio – and what you need to do to ensure you remain compliant, PM+M’s MTD specialists would be happy to help. Get in touch with Rosie Cooper by clicking the button below.
