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If you earn income from renting out property, you’ll soon need to follow new rules under Making Tax Digital (MTD).
From April 2026, landlords with total property and self-employment income over £50,000 will need to keep digital records and send quarterly updates to HMRC using approved software. And from 2027 and 2028, even more landlords will be included as the thresholds reduce year by year. Jump to key dates.
MTD is being rolled out gradually, but getting ahead now can save you hassle later. Whether you manage a single buy-to-let or a growing portfolio, Cutter & Co can help you get set up, stay compliant, and avoid last-minute stress.
Making Tax Digital currently applies to VAT-registered businesses, but it’s being extended to Income Tax, including rental income, over the next few years.
If you earn income from property (such as renting out one or more UK properties), you’ll need to comply with MTD depending on your total annual income from self-employment and/or property combined.
Here’s when you’ll need to comply:
If your income is below £20,000, you won’t need to follow MTD rules — for now.
These thresholds apply to your combined gross income, not your profit. If you earn from multiple properties or have both rental and self-employed income, you could be affected sooner than you think.
For official updates, visit the news and communication section of GOV.UK.
You can find a complete MTD step-by-step guide on the HMRC website; however, when Making Tax Digital applies to you, there are three key things you’ll need to do. These are:
You’ll need to record your income and expenses using digital tools. Spreadsheets alone won’t be enough.
This software must be able to send updates directly to HMRC. Options include Sage, QuickBooks, Xero, KashFlow and others. Read our guide on choosing the right software for Making Tax Digital, or view the official list of compatible software.
Instead of filing one tax return a year, you’ll send quarterly summaries and then a final end-of-year statement through your software.
If that sounds like a lot, you’re not alone. We understand the added admin this places on sole traders, especially when you’re focused on running your day-to-day business.
We’re here to help. Book a free consultation and let us handle the setup, software, and submissions so that you can stay compliant without the stress.
Making Tax Digital isn’t just about staying compliant. Once you’re set up, managing your rental income can be simpler, faster, and less stressful, especially in the long term.
Here’s how it can help:
Say goodbye to piles of receipts and manual spreadsheets. MTD encourages cleaner, more consistent digital records.
Using approved software reduces the risk of common errors, which can help you avoid penalties or missed deadlines. An independent report published in 2021 found 67% of businesses reported that MTD reduced the potential for mistakes in their record keeping. Read our guide on choosing the right software for Making Tax Digital.
Quarterly updates may sound like more administrative work at first, but once your system is in place, many businesses find it easier to stay on top of things – no more last-minute scrambling at tax year-end.
Many MTD-compatible tools offer real-time insights, so you can see how your business is performing at any point in the year.
Staying ahead of tax deadlines and knowing your records are HMRC-compliant gives you confidence and security.
Whether you let out one property or manage a growing portfolio, Making Tax Digital doesn’t have to be complicated, and you don’t have to figure it out alone.
At Cutter & Co, we can guide you through every step, from choosing the right software to submitting your quarterly updates with confidence.
We can help you:
Ready to get started, or want to find out more about Making Tax Digital? Book a consultation today.
From April 2026, if your total self-employment and property income is over £50,000.
From April 2027, if your total self-employment and property income is over £30,000.
From April 2028, if your total self-employment and property income is over £20,000.
Yes. If your property income pushes your total income over £50,000 from April 2026, over £30,000 in April 2027 , and over £20,000 in April 20208, you’ll need to follow MTD rules.
Your income from both sources is added together. If the combined total is over £50,000 from April 2026, or £30,000 from 2027, or over £20,000 from April 20208, you’ll need to comply with MTD for Income Tax.
You can use spreadsheets, but they must be linked to HMRC-recognised software to submit your data digitally. Manual entry is no longer allowed for MTD submissions.
You’ll need HMRC-recognised software such as Xero, Sage, QuickBooks, or KashFlow. HMRC have a list of commercial software that works with Making Tax Digital. Cutter & Co can also help you choose and set it up.
If your income is over £50,000, you'll start submitting quarterly updates from April 2026. If your income is over £30,000, the start date is April 2027. If your income is over £20,000, the start date is April 2028.
Yes — but instead of one big return at the end of the year, you'll submit quarterly updates and then a final end-of-year declaration via MTD-compatible software.
You could face penalties or fines for non-compliance. HMRC plans to introduce a points-based penalty system for late submissions under MTD.
We’ll explain what MTD means for you, recommend the right software, help you get set up, and take care of submissions — so you can stay compliant without the stress. You can contact us to book a consultation.
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