Section 24 and income
Making Tax Digital for landlords: dates and what to do
When Making Tax Digital applies to landlords (£50k, £30k, £20k), how jointly owned property counts, quarterly update deadlines and how to get ready.
Making Tax Digital for Income Tax (MTD) has started. Since 6 April 2026, landlords with qualifying income over £50,000 in 2024/25 have had to keep digital records and send quarterly updates to HMRC. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.
For portfolio landlords, the question isn't whether MTD will apply, but when. This article sets out the dates, how jointly owned property counts, and what to do now.
The dates
| You must use MTD from | If your qualifying income in this tax year was over | Based on |
|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 return |
| 6 April 2027 | £30,000 | 2025/26 return |
| 6 April 2028 | £20,000 | 2026/27 return |
April 2027 is also when the new property income tax rates of 22%, 42% and 47% start. See our article on the 2027 rates.
What counts as qualifying income
Qualifying income is your gross income from self-employment and property, before expenses, as shown on the tax return for the relevant year.
- Included: rent from UK and overseas property you own personally; self-employed turnover.
- Not included: salary, pensions, dividends, savings interest, partnership profit shares, and rent received by a company.
Because it's gross, a landlord with high costs and mortgage interest can be in MTD while making a modest profit. Three or four buy-to-lets can easily take rent over £30,000.
Illustrations
These are illustrations, not client examples.
| Landlord | Rent | Other income | Qualifying income | MTD from |
|---|---|---|---|---|
| Sole owner of four flats | £42,000 | Salary £60,000 | £42,000 | April 2027 (if 2025/26 similar) |
| Couple owning £50,000 of rent 50:50 | £25,000 each | Pensions | £25,000 each | April 2028 (if 2026/27 over £20,000) |
| Landlord with a company | £20,000 personal, £60,000 in company | Dividends | £20,000 | Not yet (must exceed £20,000) |
Jointly owned property
You count your share of the rent. HMRC's example: a property with £50,000 of income owned equally gives each owner £25,000 of qualifying income. The rule is the same for spouses and other co-owners.
If a managing agent or co-owner only tells you your share after expenses, HMRC will use that net figure.
Joint owners also get two practical easements:
- you can keep less detailed digital records for jointly let property; and
- you can leave jointly let property expenses out of quarterly updates, then add them before filing the tax return.
You only need records of your own share of the income and expenses.
Quarterly updates
Updates are cumulative from the start of the tax year.
| Standard period | Calendar period (optional) | Update due |
|---|---|---|
| 6 April to 5 July | 1 April to 30 June | 7 August |
| 6 April to 5 October | 1 April to 30 September | 7 November |
| 6 April to 5 January | 1 April to 31 December | 7 February |
| 6 April to 5 April | 1 April to 31 March | 7 May |
You choose calendar periods in your software before your first update. After you've sent one, you can't switch for that tax year.
The tax return is still due by 31 January after the tax year, through your software. That's where you add savings, dividends and partnership income, and where the Section 24 credit and other reliefs are finalised.
Payment dates don't change.
Penalties
MTD uses a points system for late submissions. HMRC won't apply penalty points for late quarterly updates in 2026/27. After that, each late submission adds a point, and a mandated taxpayer who reaches four points pays a £200 penalty. Late tax returns and late payments are penalised as before.
Partnerships and companies
- Partnerships aren't in MTD for Income Tax yet. HMRC will set out a timeline later.
- Companies pay corporation tax and aren't in MTD for Income Tax. Rent received by your company doesn't count towards your threshold.
Some landlords ask whether to incorporate to avoid MTD. That's rarely a good reason on its own: company accounts and returns bring their own compliance. If incorporation is worth considering for other reasons, read our worked example.
How MTD fits with Section 24 and the 2027 rates
Quarterly updates report your income and expenses. They don't calculate your final tax. Several things that matter most to portfolio landlords are dealt with only in the annual return:
- the Section 24 credit on mortgage interest, at 20% for 2026/27 and 22% from 2027/28;
- the new property income rates and the rule that taxes property income after your salary or pension;
- brought-forward losses, the personal allowance taper above £100,000, and income from other sources.
So the running totals your software shows during the year can look very different from your final bill. Landlords with large mortgages are the most likely to be surprised, because interest goes into the updates as a cost while the tax relief arrives only at the end, at a fixed rate.
A sensible approach is to use the first two quarterly updates of 2027/28 to re-estimate your tax on the new rates, so your payments on account and cash planning aren't based on old figures.
Common misconceptions
- "MTD means paying tax quarterly." It doesn't. Payment dates are unchanged.
- "My accountant files once a year, so I'm not affected." Your accountant can file for you, but they'll need your records every quarter.
- "Only profit counts." The threshold is based on gross rent and turnover.
- "Joint owners count the whole rent." Each counts only their own share.
- "Putting new purchases in a company reduces my threshold." It can, for that rent, but it's rarely a good reason to use a company on its own.
What to do now
- Check your numbers. Find your gross property income on your 2025/26 return. If it's over £30,000, you're in from April 2027.
- Separate your bank accounts. One account for rental income and costs makes digital records far easier.
- Choose software, or a spreadsheet with bridging software. Ask your accountant which they support.
- Decide on update periods. Calendar quarters can suit agents who report monthly.
- Agree who does what. Your accountant can send updates for you, but you'll need to get records to them each quarter.
- Sort out joint ownership. Make sure each owner knows their share, and whether a Form 17 declaration means the split isn't 50:50.
- Plan for April 2027 together. The new property rates and MTD start on the same day.
How we fit in
We're property tax advisers rather than a bookkeeping service, and we work alongside your accountant. Where MTD prompts a wider look at how your portfolio is owned, for example between spouses or through a company, we review the options on a fixed fee agreed upfront, and we respond the same working day.
This article is general information, not advice. Tax rules change and their effect depends on your circumstances. Please speak to us before acting.
