Expert Guide

Making Tax Digital for landlords

MTD for landlords: FAQs

We’ve pulled together the top questions we get asked as property accountants about Making Tax Digital. If you have a question we've not answered, please get in touch.

The mandatory use of MTD software is being phased in from April 2026, rather than April 2024 for landlords and self-employed individuals. Learn more >

Does MTD mean you need to pay tax four times a year?

No. Whilst you’ll need to submit quarterly updates four times a year, how you pay self-assessed income tax is not changing. This means you’ll continue to either make a single annual payment before 31st January, or two payments on account throughout the year.

Will all landlords be affected by MTD or just BTL landlords?

You might be wondering if MTD just applies to residential buy-to-lets. Well, it doesn’t. All rental income from personally owned property is in scope for MTD, including:

  • HMOs and student lets

  • Furnished holiday lets

  • Commercial or mixed-use property

  • Non-UK property, such as a holiday apartment abroad

Who is exempt from Making Tax Digital?

You can apply for an exemption if it's not reasonable or practical for you to use computers, software or the internet to follow the rules for Making Tax Digital. This could be because of your age, a disability or where you live, or religion.

If I have to keep a tenancy deposit to pay for repairs, is it included in my MTD for Income Tax calculations?

Yes. If you’re holding back a tenancy deposit, this will count towards your £50,000 threshold for MTD along with your rental income.

I own more than one property, does MTD apply per property?

If you’re receiving rental income from multiple properties, and the total is more than £50,000 per year from 2026 or £30,000 from 2027, you must comply with MTD for income tax. Making Tax Digital applies per taxpayer, not per property, and includes all property income and income from self-employment.

I own a holiday let in Spain (non-UK property). Is that included in MTD?

Yes. If you own a property overseas, the rental income you receive is included in the £50,000 MTD threshold, along with UK property.

Are furnished holiday lettings (FHLs) included in MTD?

Yes, rental income from furnished holiday lets is included in the £50,000 Making Tax Digital threshold.

I’m a buy-to-let landlord. Does MTD affect me?

If own buy-to-let property in your personal name and earn over £50,000 from rental income, Making Tax Digital will apply to you.

I receive rental income from an inherited property. Does MTD apply to me?

If you earn over £50,000 in rental income from your inherited property then yes, MTD for Income Tax will apply to you.

Can I continue submitting paper tax returns?

If you’re in scope for MTD and earn over £50,000, you’ll need to submit your tax information digitally. If you don’t earn £50,000 per year, MTD won’t apply to you and you can continue to submit Self Assessment tax returns - either digitally or by paper if you wish.

How will software work with jointly owned properties and MTD submissions?

MTD applies per taxpayer, so if you own a share of a property with another person, your portion of the rental income will count towards your MTD threshold. If your share of rental income is over £50,000, then you’ll personally be in scope for MTD. However, with a jointly owned property there’s nothing to stop you from sharing digital records and making separate submissions.

Will there be free MTD software for landlords?

You may be wondering about whether there's going to be any free software available from HMRC as there is for other tax returns. The short answer is no.

HMRC have said that they're not going to produce any free making tax digital software. Instead, they want software companies to make their products available for free for the smallest landlords.

If you just have a single rental property, there's a good chance that between now and April 2026 that there will be some free MTD software available to you.

(Here's a little secret: that's something we're working on here at Provestor! 🤫)

How much will MTD software cost landlords?

Costs vary, but HMRC expects MTD software should cost landlords somewhere in the region of £11 per month.

My property is fully managed by a letting agent, will they make my submissions?

No. Whilst your agent will hold some of the information you need to submit - like rental income and maintenance costs - they don’t have the complete picture, including things like mortgage interest payments, insurances and other outgoings.

If you are using an agent, you will need to get detailed line-by-line records from them at least every quarter, and copy the records into MTD compatible software. With Provestor, it’s as simple as dragging and dropping your agent statement into our app, and we’ll take care of the rest.

Can I use spreadsheets for MTD?

If you use spreadsheets or hand all your records over to your accountant at the end of the year, then you're going to need to switch to some electronic bookkeeping software, such as Provestor’s property accounting app.

It will still be possible to submit MTD returns using a spreadsheet, however you’ll need MTD-compatible bridging software to enable the spreadsheet to submit the required data to HMRC. Importantly, HMRC states that information from a spreadsheet must not be physically re-typed into another software package.

What software do landlords need for Making Tax Digital?

You may already keep your business records in a digital format using software. The difference with MTD compatible software is that it will be capable of:

  • maintaining business records as set out in the regulations

  • preparing and sending quarterly updates and end of period statements using the information maintained in your records

  • finalising your business income and submitting your declaration after the end of the tax year

  • communicating with HMRC digitally through an API

If you're already using bookkeeping software, such as Provestor’s property accounting app, then there's a good chance that your current software will be ready in time for MTD, and there shouldn't be any extra cost for you.

I own rental property in a partnership. Will MTD affect me?

Partnerships will need to sign up to MTD at some point in the future. HMRC has said it will announce dates for other types of partnerships, including LLPs and those with corporate partners, at a later date.

I’m a landlord that’s registered as a limited company? Will MTD affect me?

If you own your properties in a limited company, you don’t need to worry about MTD for Income Tax just yet - this is set to be introduced by HMRC after 2026.

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