Making Tax Digital for landlords: who files quarterly and from when

The income thresholds and start dates

Your start date depends on your “qualifying income”: the combined gross income from self-employment and property (rent before expenses, not profit). The waves:

• •April 2026 — qualifying income over £50,000 (already live)
• •April 2027 — qualifying income over £30,000
• •April 2028 — qualifying income over £20,000 (announced; being legislated)
• •Below £20,000 — outside MTD for now, annual Self Assessment continues

What actually changes for you

Under MTD you must keep your rental income and expense records digitally, in software that can talk to HMRC. Every quarter, that software sends HMRC a summary of income and expenses. After year end you finalise things in a final declaration, which replaces the Self Assessment return.

That is five interactions with HMRC per year instead of one — but each is smaller, and the software does the arithmetic. The real work is the habit change: recording income and expenses as they happen instead of shoebox-and-panic every January.

The gross income trap

The thresholds are on gross rent, not profit. A landlord with two properties renting at £1,300 a month each has £31,200 of qualifying income — into the 2027 wave even if the mortgages eat most of it. Joint owners count their share of the rent.

If you also have sole-trader income, it adds to the same test. Plenty of landlords who think of themselves as “small” will cross £20,000 by 2028.

Penalties for getting it wrong

MTD comes with a points-based penalty system: each missed quarterly submission earns a point, and at four points you get a fixed penalty, with further penalties for continued failures. Late payment penalties run separately and scale with how late you are.

The points system is forgiving of a one-off slip and unforgiving of chaos — exactly the failure mode of a busy self-managing landlord without a system.

How to get ready

Whichever wave you are in, the preparation is the same:

• •Work out your qualifying income (gross rent + any sole-trade turnover) to find your start date
• •Pick MTD-compatible software from HMRC’s recognised list — there are dozens, including free options
• •Open a separate bank account for rental income and expenses if you haven’t — it makes digital records nearly automatic
• •Digitise this year’s records now, so your first MTD year doesn’t start with a backlog
• •If an accountant files for you, confirm they are MTD-ready and who sends the quarterly updates

Where LetClerk fits (and where we don’t)

LetClerk is not a tax adviser and does not file with HMRC — deliberately. What we do is keep your compliance paperwork and property records organised so your accountant (or your software) gets clean inputs, and we work alongside partner accountants who handle the filing itself.

If your compliance records are a mess, MTD makes it five times more visible. The £99 Full Compliance Audit puts the property side straight; your accountant handles the numbers.

Common questions

I earn under £20,000 in rent — do I need to do anything?

Not yet. Below £20,000 of qualifying income you stay on annual Self Assessment for now. Watch the threshold though: rent rises can pull you into the 2028 wave.

Is the threshold based on profit or gross rent?

Gross rent (plus any self-employment turnover), before mortgage interest or any expenses. This is the most common misunderstanding — a landlord can be loss-making and still be inside MTD.

Do jointly-owned properties count?

You count your share of the gross rent towards your own qualifying income. Each joint owner runs the test separately, and there are simplifications for jointly-let property records — your software or accountant applies them.

Can I still use a spreadsheet?

Only with “bridging software” that connects the spreadsheet to HMRC digitally. Retyping numbers into a portal doesn’t satisfy the digital-links rule. Most landlords find proper MTD software easier than maintaining a compliant spreadsheet chain.

Does LetClerk file my quarterly updates?

No — filing is accountant territory and we stay out of it by design. We keep the property and compliance records organised and hand clean data to you or your accountant, and we can introduce you to MTD-ready accountants who work with our clients.