MTD ITSA for landlords — the 2026 guide

When does MTD ITSA start?

HMRC is phasing MTD ITSA in by income level over three years. The thresholds are based on gross qualifying income from the 2024/25 tax year (and subsequent years), measured against the start of each phase:

If your qualifying income is below £20,000, you won't be in scope of MTD ITSA at all under current rules. HMRC may extend this further in future Budgets.

What counts as “qualifying income”?

This is the question that catches most landlords out. Qualifying income is the combined gross turnover from:

• Self-employment (sole trader trading income)
• UK property rental income
• Overseas property rental income

It is gross rent, not profit. A landlord with £55,000 of annual rent and £15,000 of expenses has a qualifying income of £55,000 — and is in scope from April 2026, even though their taxable profit is only £40,000.

It also combines self-employment and property income. A self-employed plumber earning £35,000 trading income who also rents out one property for £20,000 will exceed the £50,000 threshold and be in scope from April 2026.

What you'll have to do under MTD ITSA

1. Keep digital records of every property income receipt and expense transaction in approved software. Spreadsheets are allowed only if bridged via compatible software — paper records are not.
2. Submit quarterly updates to HMRC summarising income and expenses for the period. Due 7 August, 7 November, 7 February and 7 May each tax year.
3. Submit a Final Declaration after the tax year end — the equivalent of today's annual Self Assessment return. Due 31 January the following year.
4. Pay your income tax by the existing Self Assessment deadlines (31 January, plus payments on account in July if applicable). Payment dates are unchanged.

Quarterly deadlines: the 2026/27 tax year

Each update period runs from the start of the tax year, not just the previous three months — see the full quarterly deadline calendar for what that means in practice and the standard-vs-calendar period choice.

Limited-company landlords: exempt

MTD ITSA only applies to individuals (and partnerships, in a later phase). Limited companies don't file Self Assessment for rental income — they file Corporation Tax. Properties held in a Special Purpose Vehicle (SPV) or other ltd-company structure are out of scope of MTD ITSA.

The government has confirmed it does not intend to introduce MTD for Corporation Tax, so ltd-company landlords have no equivalent quarterly-reporting obligation on the horizon.

What you should be doing now

• Work out your 2024/25 qualifying income. If it was over £50,000 gross, you should have started from 6 April 2026 — HMRC says you can still sign up now. Over £30,000 in 2025/26 means you start from 6 April 2027.
• Pick MTD-compatible software — HMRC publishes a recognised list. Make sure it covers property income (not just self-employment).
• Switch to digital record-keeping now. Don't wait until April 2027 with a year of paper receipts to digitise retroactively.
• Set up a separate landlord bank account if you haven't. Mixing personal and rental transactions makes digital categorisation a nightmare.
• Talk to your accountant. Quarterly updates need quarterly bookkeeping — clarify who's doing what before 6 April rolls around.

Penalties for missing quarterly deadlines

HMRC uses a points-based penalty system. You get one point for each missed tax return deadline and, for tax years after 2026/27, each missed quarterly update deadline — there are no penalties for late quarterly updates for 2026/27. At 4 points you get a £200 penalty, and £200 for each further missed deadline. Points clear after a period of consistent on-time filing. Late payments attract interest and the new late-payment penalties (for 2026/27, 3% at day 15, a further 3% at day 30, then 10% a year).

Budget 2026 easement: if you first have to join MTD from 6 April 2027 (qualifying income over £30,000), HMRC won't give you late-submission points for quarterly updates in the 2027/28 tax year either. Late tax returns still get points, and you still need to send your quarterly updates before you can file your tax return. Landlords who joined in April 2026 get quarterly-update points from 2027/28 as normal.

New exemptions announced at Budget 2026

The Budget on 28 October 2026 said these groups will be exempt from MTD for Income Tax until further notice, with the rules to follow in secondary legislation before April 2027:

• people eligible for qualifying care relief (for example foster carers)
• non-UK resident foreign entertainers and sportspeople
• people HMRC expects to be non-UK resident

If you're a non-resident landlord, check how the final rules define this group before you assume you're out of scope.

FAQ

Disclaimer: This guide is general information, not tax advice. MTD ITSA rules can change at short notice in Budgets and HMRC guidance. Always check the current HMRC position or consult a tax adviser for decisions about your own affairs.