For many landlords, 2026 is shaping up to be one of the most demanding years in recent memory. Significant regulatory change is arriving on multiple fronts at once, including reforms to tenancy law, tightening expectations around energy efficiency, and the phased introduction of Making Tax Digital for landlords under Income Tax Self-Assessment.
Each of these changes brings its own administrative and compliance pressures. Taken together, they reinforce a broader shift towards greater scrutiny, clearer record-keeping, and the need to demonstrate compliance, rather than simply asserting it.
At Fleming Lettings, we have already explored this wider trend in our article Why Regulation Matters When Choosing a Letting Agent, which examines how landlords are increasingly expected to evidence good practice across all aspects of their rental business. MTD for landlords in 2026 forms part of the same wider compliance direction, rather than sitting in isolation.
What is making tax digital for landlords?
Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA), commonly referred to simply as Making Tax Digital, is a change to how certain taxpayers report income to HM Revenue & Customs.
From April 2026, individuals with qualifying income over £50,000 per year will no longer submit a single annual self-assessment tax return for Income Tax. Instead, they will be required to:
- Keep digital records of income and expenditure
- Submit quarterly updates using HMRC-approved software
- Complete an end-of-year finalisation process
For landlords, it is important to be clear that the threshold is based on income, not profit. Gross rental income is what counts, before expenses are deducted.
Making Tax Digital does not introduce new taxes or higher tax rates. However, it does represent a significant shift in how landlord tax reporting is carried out, moving away from annual retrospective reporting towards more frequent digital submissions.
Who needs to be concerned about making tax digital in 2026?
Despite the attention it has received, Making Tax Digital for landlords will not apply to everyone immediately.
You are unlikely to be affected in April 2026 if:
- Your qualifying income is below £50,000 and expected to remain so
- Your rental properties are owned through a limited company and taxed under Corporation Tax
- You own property jointly and your individual share of the income falls below the threshold
- You meet HMRC’s strict criteria for digital exclusion due to health, disability, or religious reasons
In practical terms, this means the majority of private landlords will not be within scope in the first year. Estimates suggest fewer than one in five landlords will need to comply initially, although this number will rise as thresholds are reduced in future years.
Landlords who already use a competent accountant may also find the transition straightforward, provided arrangements are discussed well in advance of April.
Why the transition still deserves attention
Even where Making Tax Digital does apply, it is not inherently unmanageable. The greater risk lies in timing and overlap, rather than the technical requirements themselves.
April 2026 may coincide with landlords:
- Adjusting existing tenancies in response to wider tenancy reform
- Finalising the 2025–26 tax year under the current self-assessment system
- Beginning quarterly tax reporting for landlords under MTD
- Managing properties held across different ownership structures
In some cases, landlords may be dealing simultaneously with a self-assessment return, their first MTD quarterly updates, and a Corporation Tax return. Without disciplined processes, this creates scope for misreporting, missed deadlines, or misallocation of income and expenditure.
Where landlords are most likely to encounter difficulties
In practice, the most common issues under Making Tax Digital are not technical failures, but process-related ones.
Landlords often struggle with:
- Mixing personal and rental finances
- Inconsistent categorisation of income and expenditure
- Relying on retrospective record-keeping
- Underestimating the discipline required for quarterly reporting
These problems may not be immediately obvious, but can compound quickly across reporting periods. Landlords who adopt consistent systems early tend to experience far fewer difficulties than those who attempt to adapt mid-year.
Process, not panic: preparing for mtd for landlords
The most effective way to approach Making Tax Digital for landlords is to treat it as a change in working habits, not a one-off reporting obligation.
Historically, many landlords have relied on annual catch-up accounting, organising spreadsheets and receipts shortly before submission deadlines. While workable under the old system, this approach is unlikely to remain sustainable under quarterly reporting.
Practical preparation involves:
- Recording income and expenditure consistently throughout the year
- Keeping property finances clearly separated from personal accounts
- Using systems that categorise transactions accurately
- Reviewing records regularly, rather than retrospectively
For some landlords, appointing an accountant will remain the lowest-stress option, particularly where arrangements are complex. Others may manage their own reporting successfully, provided they put robust processes in place early.
Making tax digital as part of wider landlord compliance
It is helpful to view Making Tax Digital for landlords in context. It is part of a broader expectation that landlords:
- Maintain accurate, accessible records
- Evidence compliance across all legal obligations
- Respond promptly to regulatory scrutiny
This mirrors developments elsewhere in the private rented sector, where landlords are increasingly expected to demonstrate compliance, not simply claim it. This includes tenancy documentation, safety records, and energy efficiency planning.
For a broader discussion of how regulation is reshaping landlord responsibilities, you may wish to read our article on the wider compliance pressures landlords now face.
From this perspective, Making Tax Digital reinforces the same underlying principle: good administration reduces risk.
How fleming lettings supports landlords
Fleming Lettings does not provide tax advice and does not submit tax returns on behalf of landlords. However, we recognise that landlord tax reporting changes do not exist in isolation.
Our role is to help landlords understand how different compliance obligations interact, where risks commonly arise, and how strong documentation and process discipline reduce the likelihood of issues escalating. Where appropriate, we encourage landlords to engage qualified tax professionals and to plan well in advance rather than reacting under pressure.
Planning ahead for making tax digital in 2026
Making Tax Digital for landlords does not need to be disruptive. For most landlords, it will not apply immediately, and for those who are affected, the changes are manageable with early preparation.
What matters most is avoiding last-minute adjustments and recognising that modern compliance is increasingly about evidence and consistency, rather than retrospective correction.
Landlords who plan early, adopt structured systems, and understand where their responsibilities sit are far more likely to experience a smooth transition.
For official guidance, landlords may also wish to consult resources published by National Residential Landlords Association and HMRC directly.
Frequently Asked Questions
Possibly. HMRC determines whether you are in scope based on your qualifying income for a specific tax year. If your rental income fluctuates around the £50,000 threshold, you may move in or out of scope between years. This makes forward planning particularly important, as landlords close to the threshold may need to prepare for compliance even if they are not immediately affected.
No. Once a landlord is within scope for Making Tax Digital, they will generally be required to remain within the system for Income Tax reporting, even if their income later falls below the threshold. This is one reason why early preparation and understanding the long-term implications matters.
No. Making Tax Digital changes how information is reported, not what can be claimed. The rules around allowable expenses, reliefs, and deductions remain the same. However, the move to quarterly reporting means expenses must be recorded more consistently, rather than reconstructed retrospectively.
Quarterly updates under Making Tax Digital are not final tax calculations. HMRC allows figures to be corrected and adjusted during the end-of-year finalisation process. That said, repeated inaccuracies can create administrative complexity and increase the risk of scrutiny, which is why good record-keeping from the outset is important.
HMRC has indicated that there will be a soft-landing approach during the early stages of Making Tax Digital, particularly around penalties for errors rather than deliberate non-compliance. However, this should not be relied upon. Landlords are still expected to make reasonable efforts to comply and to use appropriate systems once in scope.
Letting agents may handle rent collection and provide statements, but responsibility for tax reporting remains with the landlord. MTD requires landlords to ensure their financial records are compatible with HMRC-approved software, regardless of whether properties are self-managed or professionally managed. Clear communication between landlords, agents, and accountants becomes increasingly important.
Yes. The £50,000 income threshold is scheduled to reduce in future years, bringing more landlords into scope. While the core framework is now set, reporting requirements and thresholds may evolve over time. Landlords who adopt good digital processes early are likely to find future changes easier to manage.
Even landlords who are not immediately within scope are likely to face MTD requirements in the future. Using consistent digital record-keeping now can reduce disruption later, improve financial visibility, and support wider compliance obligations across the rental business.
Making Tax Digital sits alongside wider reforms that increasingly expect landlords to demonstrate compliance, not simply assert it. From tenancy management to financial reporting, the direction of travel is towards structured systems, clear records, and proactive administration.
