Let's talk about the elephant in the room: Making Tax Digital

Susie Barford, Head of Marketing and Public Relations (ARLA & NAEA) at Rickman approaches a topic that is currently being pushed into the background by other industry changes.

While most industry professionals are currently obsessed with the Renter’s Rights Bill and the impending new legislation around that, there is another huge change that will affect Landlords just round the corner and it has become the elephant in the room…


Making Tax Digital (MTD) comes into effect from April 2026 and it will massively change the obligations of landlords in reporting their income and expenditure. As a property industry professional and someone with years of personal experience as a landlord, I feel it is a topic we need to be talking about much more than we are. 

The National Residential Landlords Association (NRLA) says it is ‘all part of an initiative to improve efficiency, modernise and streamline the tax collection system, affecting landlords and small businesses'. It was first suggested in the 2015 Budget and MTD was originally going to be introduced in April 2024 for all landlords with income over £10,000. However, it is going to be a more staggered process, dealing with different income brackets in different years as it is rolled out, moving landlords from traditional self assessment to MTD reporting in the process. 

The NRLA explains if your total rental income reported on your 2024/25 tax return, before expenses, exceeds £50,000 you will need to comply with MTD from April 2026, and if it exceeds £30,000 you will need to comply from April 2027, then £20,000 from April 2028. It is important to note that ‘if you are a landlord who also has self employment income, the records will need to be kept separate, but the total of both income sources will count towards your qualifying income levels’. 

Even if your property income does not currently meet the £50,000 threshold, but might do in later years as the thresholds move down, it might be a good time to get used to the new way of reporting income before it becomes mandatory by 

• Keeping digital records of income and expenses
• Reporting interim updates to HMRC every quarter
• Using compatible software to send your Self Assessment Tax Return (including your property information) to HMRC by 31st January. 

Landlords with large portfolios really need to prepare and the idea is that it should make reporting easier in the long term . However, that does not mean it will be easy and HM Revenue and Customs has already been accused of 'giving too little support to those faced with the new system’, according to Landlord Today. Another concern is that landlords and small businesses will need to invest in compatible software and may face additional administrative or accountancy costs. The shift also brings a new penalty system if one misses quarterly deadlines and could lead to fines and interest charges, adding new pressure on landlords to stay organised throughout the year, in an ever-changing market. 

I listened to a property podcast recently and Sally Lawson, a prominent lettings industry professional, was talking about when the Tenant Fee ban came into place in 2019, and we all thought the industry was going to be thrown into chaos. ‘Well’, she said, ‘if we can get through that, we can get through anything’. I could not have put it better myself! In fact, I've tried playing around with some of the recommended software for landlords and the self-employed to digitally record their income and expenses, and it is very user friendly for the most part. The advice of a good tax accountant can also be a great help. If these changes will affect you as a landlord, it is time to do your own research on the matter and seek professional guidance and support if needed. 

As a related issue within our remit as an estate agent, you can also contact Rickman today to arrange a rental or sales valuation and talk about the options available for your portfolio. 

Susie Barford (ARLA & NAEA) 
Head of Marketing & Public Relations 
Rickman