How does Making Tax Digital affect landlords?

Making Tax Digital for Income Tax (MTD) is part of Making Tax Digital for landlords. If you want the plain-English version of what MTD is before you read on, start with what Making Tax Digital is.

Who Making Tax Digital affects

MTD for Income Tax applies to individuals who report income from UK property, self-employment, or both, once their gross income from those sources passes a threshold. If you let property in your own name and your income is over the line for your wave, you are in. It is phased in by income, with the highest earners brought in first, so your start date depends on your own figures.

Whether you are in, which wave you fall into, and exactly what counts toward the threshold are all covered in detail on the qualification page. To see your own start date from your own numbers, including how to handle a jointly owned property, check the Am I in for MTD? page and run the calculator there.

What actually changes once you are in

This is the part that matters for planning your year. Being in MTD changes how you report, not how much tax you pay or when you pay it.

Three things are different:

• You keep digital records. You record your property income and expenses using software, rather than pulling figures together once a year. Good record keeping stops being an annual scramble and becomes something that happens as you go.

• You send quarterly updates. Four times a year you send HMRC a running total of your property income and expenses. These are cumulative, each one builds on the last from 6 April. They are estimates, not a tax bill, and you are not locked into the figures. We cover the dates and the mechanics in the guide to quarterly updates.

• You submit a final declaration. After the tax year ends you submit a final declaration that confirms your figures and any other income, replacing the old Self Assessment return. This is where your actual tax position is settled.

What does not change is just as important. Your tax rates are the same. Your allowable expenses are the same. Your payment dates are the same, 31 January and 31 July as before. MTD changes the rhythm of your reporting, not the substance of your tax.

The one thing worth pinning down before any of this matters is which wave your own share of the income lands you in.

Jointly owned property

Most rental property in the UK is owned by more than one person, and joint ownership is where MTD trips people up most often. The rule itself is straightforward once you see it: each owner is assessed on their own share of the gross income, not on the property's total.

So you do not look at what the property earns. You look at what your slice of it earns, and you compare that to the threshold.

For married couples and civil partners, the default split is 50/50, regardless of who actually collects the rent or whose name is on the bank account. You can change that split to reflect actual beneficial ownership, but only by making a Form 17 election with HMRC and backing it with evidence of the real ownership shares. Unmarried co-owners are assessed on their actual beneficial shares from the start.

The consequence catches people out: two owners of the same property can land in different MTD waves. One can be in from April 2026 while the other is not in until a later year, purely because their shares of the gross rent fall either side of a threshold.

Worked example: Tom and Sarah

Tom and Sarah are married and jointly own a buy-to-let that brings in £64,000 of gross rent a year. They have made no Form 17 election, so HMRC treats the income as split 50/50.

Each of them is assessed on £32,000, their half of the gross rent. Neither is over £50,000, so neither is in the first wave from April 2026. But £32,000 is over £30,000, so both are brought in from 6 April 2027, the second wave.

Now change one detail. Suppose they had made a Form 17 election reflecting that Tom holds 80% of the beneficial ownership and Sarah 20%. Tom's share of the gross rent becomes £51,200, over £50,000, so he is in from April 2026. Sarah's share becomes £12,800, under £20,000, so she is not brought into MTD at all on these figures. Same property, same rent, two completely different MTD positions.

That is the heart of joint-ownership MTD: the property does not have a wave, the people do. If you want to see how this plays out in practice and how the splits are handled inside Provestor, the joint-ownership splits help page walks through the in-app mechanics. To check which wave your own share lands you in, run the figures through the Am I in for MTD? calculator.

Limited companies

If you hold property through a limited company, MTD for Income Tax does not apply to you. MTD for Income Tax is for individuals reporting personal income. Companies report through Corporation Tax instead, and HMRC has not set a date for bringing them into a digital regime of this kind. So if your lets sit inside a company, this particular change passes you by, although your own personal income from any property you own outside the company is still assessed in the normal way.

If you have rental and self-employment income

If you are both a landlord and a sole trader, the two add together. HMRC looks at your gross income from UK property and your gross income from self-employment combined, and that total is what it compares to the threshold. £30,000 of rent and £25,000 of self-employed turnover is £55,000 of qualifying income, which puts you in the first wave even though neither source alone would. To see exactly how the combined figure is worked out, check your MTD threshold on the qualification page.

What to do next

If you are not yet sure whether you are in or which wave you fall into, the Am I in for MTD? page does the threshold maths for you, applies the right share if you own jointly, and tells you your exact start date.

If you would rather see how the day-to-day works once you are in, take a look at how Provestor handles MTD.