Nikka Sulton

Landlords earning more than £50,000 from qualifying income have until 7 August 2026 to submit their first quarterly update under the government’s Making Tax Digital (MTD) for Income Tax scheme.

The new reporting system marks a major change to how landlords and self-employed individuals manage their tax records, with more than 864,000 taxpayers now required to comply with the digital rules.

First Quarterly Update Due Soon

The first quarterly submission covers income and allowable expenses recorded during the opening months of the 2026/27 tax year.

For most landlords, this reporting period runs from 6 April to 5 July, although those using calendar-based reporting will report figures from 1 April to 30 June. Regardless of which reporting method is used, the submission deadline remains 7 August.

Digital Record Keeping Is Now Required

Making Tax Digital requires landlords within the income threshold to maintain digital financial records and submit quarterly updates using HMRC-approved software.

For landlords already using compatible accounting software, the process should be relatively straightforward. Many software providers also include tools that can highlight potential errors before information is submitted, helping users identify mistakes in advance.

However, landlords remain responsible for ensuring all figures are accurate before they are sent to HMRC.

Quarterly Updates Are Not Tax Returns

Although quarterly updates must now be submitted throughout the year, they do not replace the annual Self Assessment tax return.

Instead, these updates provide HMRC with a summary of income and expenses as the tax year progresses. Landlords will still need to complete their Self Assessment return and pay any tax owed by 31 January 2027.

Many accounting packages also provide an estimate of the tax due based on the information submitted, making it easier for landlords to budget throughout the year.

Income Thresholds Will Continue To Expand

Making Tax Digital became mandatory in April 2026 for landlords and sole traders with qualifying income above £50,000.

The scheme will gradually extend to more taxpayers over the coming years:

From April 2027, the threshold will reduce to more than £30,000.
From April 2028, it will fall further to more than £20,000.

As these thresholds decrease, thousands more landlords and self-employed individuals will be required to adopt digital record keeping and quarterly reporting.

A Transition Period For Landlords

To help taxpayers adjust to the new system, HMRC has confirmed that no penalty points will be issued for late quarterly updates during the first year of Making Tax Digital for Income Tax.

However, existing penalties for late Self Assessment tax returns and overdue tax payments remain in place, meaning landlords should continue to meet those deadlines.

Preparing For The New System

Landlords who have not yet signed up should ensure they register for Making Tax Digital and confirm that their accounting software is compatible with HMRC’s requirements.

Those who use an accountant or tax adviser can also ask them to complete the registration process and submit updates on their behalf.

With the first deadline fast approaching, ensuring digital records are accurate and up to date will help landlords stay compliant and avoid unnecessary issues as the new reporting system becomes the standard for UK income tax.