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Cloud Accounting & Making Tax Digital for Landlords

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If you let property and your rental income is above £50,000, Making Tax Digital for Income Tax started for you from April 2026. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028. Most landlords with more than one or two properties will be in scope within the next two years.

MTD for Income Tax isn’t the end of Self Assessment. It changes how, and how often, you report. Instead of one annual return, you’ll file quarterly digital updates through the year, plus a final declaration at the end. The quarterly updates aren’t tax returns, and you’re not paying tax more frequently. You’re sending HMRC a running record of your property income and expenses as the year passes.

This page covers what MTD for ITSA means for landlords. For the equivalent page covering business owners and sole traders, see Cloud Accounting & Making Tax Digital.

In a nutshell: we get you onto the right software, set up the quarterly reporting cycle, and handle the submissions so the change feels like a normal part of the year rather than an additional administrative burden. Fixed fee, agreed upfront.

What changes under MTD for Income Tax?

For landlords in scope, from their MTD start date the current annual Self Assessment process is replaced by:

Quarterly updates. Four times a year, you (or we, on your behalf) submit a digital summary of your property income and expenses through MTD-compatible software. The deadlines are one month and 7 days following each quarter-end: 7 August, 7 November, 7 February, and 7 May.
Final declaration. The replacement for the current Self Assessment tax return. We make any year end accounting adjustments and deal with any interest paid. This is where all income sources come together – property income, employment income, pensions, savings – and the total tax liability is confirmed.

The underlying tax rules don’t change. What changes is the frequency and format of reporting.

What this means in practice

The quarterly update isn’t complicated, but it does require that your property records are current at the end of each quarter and in HMRC approved software. If you’re currently reconciling your rental income and expenses once a year for the Self Assessment deadline, that approach won’t work under MTD.

In practical terms, the shift to MTD means:

Rental income and expenses recorded in software as they happen (or at least monthly)
Bank statements reconciled to the property records each quarter.
The quarterly submission reviewed and filed within the deadline window.

For landlords with a small portfolio and straightforward finances, this is a modest change to the rhythm. For those with multiple properties, variable income, or complex expense patterns, it’s worth setting up the system properly from the start.

Which software?

For landlords, the two most natural choices are:

FreeAgent for Landlords– clean, accessible, and designed for property income. Works well for landlords who want to keep the bookkeeping simple. It deals with joint ownership, and multiple properties.

Xero – good if you want a full accounting platform.. Bank feeds, clear income/expense categorisation, and strong MTD compliance built in.

We’ll recommend the fit based on your situation. If you’re already on one of these, we’ll check the setup is correct and MTD-ready. If you’re not on any digital platform yet, we handle the migration from wherever you're currently hosted.

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Are you already handling your records in a spreadsheet?

Spreadsheets alone won’t meet the MTD for ITSA digital requirement. You’ll need to move records into MTD-compatible software before your start date. The sooner this happens, the less disruptive the change will be.

If your current Self Assessment is prepared from a rent book or a spreadsheet, the shift to a digital record isn’t as complicated as it sounds. We set up the software, import what we can, and work through the records with you. Most landlords are more organised than they think – the data just needs to be in the right place.

What about the Self Assessment in the meantime?

If your income is below the current threshold, you remain on the standard Self Assessment process for now. See our Personal Tax Return page and Landlord Accounts & Tax page for the current position.

As the threshold drops over the next two years, we’ll contact the clients in scope ahead of their start date and get them set up in plenty of time.

How we work

For landlords being set up for MTD:

We review your current record-keeping. What’s already in software, what’s in a spreadsheet, what’s on paper. We work out the cleanest route to MTD-compliant records.

We set up the software and configure it for property income. Chart of accounts set up to reflect your property portfolio, bank feeds connected where possible, historical records imported.

We complete the monthly bookkeeping. If you are not confident with software or simply don’t have the time, or inclination, we can complete the bookkeeping for you.

We handle the quarterly submissions. Each quarter, we pull the records from Xero or FreeAgent, review the figures, and file the update with HMRC. You approve before anything goes.

We handle the year-end declaration. The final declaration replaces the current Self Assessment process

Fixed fees, no surprises

MTD for landlords fees depend on the number of properties, the complexity of the income and expenses, whether we’re handling the bookkeeping alongside the submissions, and whether you’re migrating from paper or spreadsheet records. The right number comes from a short conversation.

Ask for a fixed fee

A couple of minutes on our online form, and we’ll come back to you with a number.

Frequently asked questions

Is MTD based on income or profit?

Even if your rental property makes a loss or a small profit, if your income (the rent you charge) is above the threshold, then you will need to report under MTD.

My income is under £50,000 so why do HMRC say I need to register for MTD?

If you have self-employed income alongside your rental income, the sales income for your self-employment is added to your rental income. If this total figure is above the threshold you will need to report under MTD.

I’m below the £50,000 rental income threshold. Do I need to do anything now?

Not yet – but the threshold is coming down. If you’re above £30,000, you’ll be in scope from April 2027. If you’re above £20,000, from April 2028. We recommend getting started with cloud accounting now rather than rushing when the deadline arrives. The earlier the setup, the less disruptive the change. Bear in mind that self-employed income also counts towards the total income threshold.

Does MTD affect the tax I pay, or just how I report it?

Just the reporting (at the moment!). The tax liability is calculated the same way under MTD as it is now. You’re not paying tax quarterly – payment dates remain the same as under Self Assessment. You’re filing quarterly records, and the tax bill is confirmed at year-end through the final declaration.

I have a mix of property income and employment income. Does MTD apply to both?

MTD for ITSA is triggered by qualifying income – rental income, self-employment income, or both combined. If you meet the threshold, the MTD quarterly reporting applies to the property or self-employment income. Employment income (via PAYE) is reported separately and unaffected by MTD, but it feeds into the final declaration.

What if I miss a quarterly filing?

HMRC uses a points-based penalty system for late MTD submissions. Each late submission earns a penalty point; accumulate enough and a financial penalty follows. We handle the submissions for our MTD clients, so this isn’t a risk you need to manage yourself.

Ready to get set up for MTD?

Three ways to start. Whichever’s easiest.

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