Making Tax Digital for Landlords: Your Last-Minute Setup Guide for April 6, 2026

Making Tax Digital for Income Tax starts on 6 April 2026. If you're reading this the weekend before the deadline and haven't set up your software yet, you're not alone — and it's not too late. This guide tells you exactly what to do, in the right order, before the new tax year begins.

This is a practical setup guide for landlords. For how to correctly categorise EPC upgrade costs inside your MTD software, see the companion article: How to Record EPC Improvement Costs in MTD.

Are You in Scope? Check Your Threshold First

MTD for Income Tax is being rolled out in stages based on your gross income from property and self-employment combined.

Source: HMRC gov.uk guidance on Making Tax Digital for Income Tax (April 2026).

Important: this is your gross rental income — total rent received before any expenses or mortgage interest are deducted. If your property income plus any self-employment income exceeded £50,000 in 2024–25, you must join MTD from 6 April 2026.

If you're below the £50,000 threshold, you have time — but the digital record-keeping principles are the same whenever you join, so reading this now gives you a head start.

Joint ownership note

If you own a rental property jointly with a spouse or partner, each person's share is assessed individually. A property generating £80,000 gross rent, held 50/50, gives each owner £40,000 — below the 2026 threshold. Check your individual share, not the property total.

Step 1: Choose Your Software First

Gov.uk is explicit: choose your software before signing up for MTD. This is the sequence HMRC requires. Don't sign up first and then scramble for software — the sign-up process links your HMRC account to an authorised software provider.

Your software must be able to:

• Create and store digital records of your property income and expenses
• Send quarterly updates directly to HMRC
• Connect to HMRC's systems via an API (it will handle this — you don't need to do anything technical)

HMRC-approved software options for landlords

Always verify that the specific product tier you purchase supports MTD for Income Tax — some entry-level tiers cover only MTD for VAT (a different scheme). The gov.uk software finder lists all fully compliant products.

Landlord recommendation: If your only trading income is property rental, a property-specific platform like Hammock will pre-populate property categories correctly and reduce categorisation errors. If you also have self-employment income, a general platform like FreeAgent or QuickBooks may be more practical.

Step 2: Sign Up for MTD with HMRC

Once you've chosen your software and authorised it, sign up at:

gov.uk → "Sign up for Making Tax Digital for Income Tax"

You'll need:

• Your Government Gateway user ID and password
• Your National Insurance number
• Your Unique Taxpayer Reference (UTR)
• Your property income details

After sign-up, you'll receive a confirmation letter from HMRC. From this point, all your self-assessment submissions must go through your MTD software — you can no longer use the standard HMRC self-assessment portal to file.

⚠️ Do not sign up before you have software authorised. If you sign up without software, you'll be registered for MTD but unable to submit — which puts you in breach from day one.

Step 3: Connect Your Bank Account (Optional but Recommended)

Most MTD-approved software allows you to link your letting account bank account directly, automatically importing transactions. This eliminates manual data entry and reduces categorisation errors.

You'll still need to review and categorise each imported transaction — the software doesn't know whether a payment is rent received, a deposit, a repair, or a capital improvement. But it handles the data capture, which is where most manual-record landlords make mistakes.

Step 4: Understand What Quarterly Updates Actually Are

This is where most landlords become confused. Quarterly updates are not tax returns. They are:

• A summary of your property income and expenses for the quarter
• Sent to HMRC via your software (not filed as a formal submission)
• Due within one month of each quarter end

The four standard quarters run:

• Q1: 6 April – 5 July (due by 5 August)
• Q2: 6 July – 5 October (due by 5 November)
• Q3: 6 October – 5 January (due by 5 February)
• Q4: 6 January – 5 April (due by 5 May)

Your actual tax return (called the End of Period Statement + Final Declaration) is still submitted annually by 31 January, the same deadline as before. MTD adds the quarterly updates in addition to the annual return — at least in the initial years.

Practical implication: You don't need to calculate your tax bill quarterly. You just need to have your records up to date and push a summary to HMRC every three months.

Step 5: What to Record and How

From 6 April 2026, keep digital records of:

• All rental income received (by property)
• All allowable property expenses (repairs, insurance, agent fees, ground rent, etc.)
• Capital expenditure (EPC improvements, extensions) — in a separate capital account, not P&L

You do not need to create digital records of other income sources like pensions, dividends, or savings — but you must report these in your annual tax return.

For how to categorise EPC improvement costs specifically — the capital vs revenue split that affects both your quarterly submissions and your CGT position at sale — see: How to Record EPC Improvement Costs in MTD.

What Happens If You're Not Ready on April 6?

HMRC has indicated a transitional approach for the first year of MTD for landlords. While penalties for late or missing quarterly updates can technically apply from the start of the new tax year, HMRC has historically taken a phased enforcement stance at the beginning of major new schemes. The most immediate risk is not a fine on day one — it's locking yourself out of the standard HMRC self-assessment portal once you've signed up for MTD.

If you are in scope but haven't joined MTD by 6 April:

1. Do not sign up mid-year in a rush without software ready — this creates a compliance gap
2. Contact an accountant if you're unable to set up software yourself — they can be authorised as your agent
3. Keep paper or spreadsheet records as a temporary measure until your software is live — digital bridging software exists that can connect spreadsheets to the HMRC MTD API if needed

The key practical risk is that once your 2025–26 tax return is due (31 January 2027), HMRC will expect it to have been submitted via MTD. Keeping a record of why you were delayed protects you if HMRC queries your submissions.

MTD and Your EPC Upgrade Costs

If you've made EPC improvements since 1 October 2025 — insulation, heat pumps, solar panels, double glazing — these costs need to be tracked carefully in your MTD records. Getting the categorisation wrong (recording capital improvements as revenue maintenance) creates a CGT mismatch when you eventually sell.

See: How to Record EPC Improvement Costs in MTD: The Complete Landlord Guide — a categorisation table covering eight common EPC improvement types and how to enter them correctly.

For whether EPC upgrade costs are tax-deductible in the first place (a separate question from how to record them), see: HMRC's Capital vs Revenue Rules for EPC Upgrades.

The full picture of your April 2026 compliance obligations — MTD, the Renters' Rights Act, and EPC — is in our: April 2026 Landlord Compliance Checklist.

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