What Are Digital Tax Returns? Understanding MTD

If you’re a UK landlord, you’ve likely heard about digital tax returns by now and wondered what it means for your rental business. 

The long and short of it is this: Making Tax Digital for Income Tax started on 6 April 2026. Instead of completing one large self-assessment form each year, landlords in scope keep digital records and file quarterly updates throughout the year using approved software. 

In 2023/24 HMRC counted 7.0 million people in Self Assessment with landlord or sole-trader income. Of these, around 864,000 earn above the qualifying income threshold of £50,000 and came into MTD from April 2026.

Important note: According to HMRC, qualifying income refers to turnover from combined property and sole trader income, not profit.

This is the largest overhaul of the tax system in over three decades, and understandably, plenty of landlords found the change unsettling. With the right software and a bit of preparation, getting compliant is straightforward.  

In this article, we’ll cover all the relevant info on MTD so that you understand your duties and obligations. We’ll also look at what you can do to get ready today. 

Now let’s get into it.  

What are Digital Tax Returns?

So, what are digital tax returns? 

In HMRC-speak, digital tax returns are simply Self Assessment moved into software. You keep digital records during the year and then send quarterly updates from your software.

The rationale that the government has given for Making Tax Digital is that it will improve efficiency for HMRC, businesses, and individual sole traders and landlords by streamlining processes and improving data accuracy. 

Essentially, storing all the relevant data in one centralised system is expected to reduce tax errors and give the government and landlords a clearer view of their tax position throughout the year. 

While it might seem daunting, just remember it was introduced to make things easier and more efficient in the long run.

When Do Digital Tax Returns Apply?

When do digital tax returns apply to you? MTD for Income Tax is being phased in through several stages. 

• From 6 April 2026: Landlords with qualifying income over £50,000 must comply. (Qualifying income = gross rental income + sole trader income, before expenses.)
• From 6 April 2027: The threshold lowers to £30,000.
• From 6 April 2028: The threshold lowers to £20,000.

Your qualifying income is determined by your income from the previous year. So, if in the tax year 2025/26 you earned £60,000 in qualifying income, you came into MTD from 6 April 2026. 

As we touched on previously, once you’re in scope, the reporting rhythm changes from one annual return to four quarterly updates plus a final declaration.

For the 2026/27 tax year, the quarters run from: 

• 6 Apr–5 Jul
• 6 Jul–5 Oct
• 6 Oct–5 Jan
• 6 Jan–5 Apr

With submissions due from: 

• 7th August
• 7th November
• 7th February 
• 7th May 

You can elect to use calendar quarters, but the deadlines stay the same. Your final declaration for 2026/27 then lands on 31 January 2028. 

In summary, digital tax returns arrived for higher-income landlords in April 2026, and roll out to landlords in the lower earning brackets in 2027 and 2028. 

Read the Landlord Making Tax Digital FAQs

When Do I Need to Sign Up for MTD?

Step 1: Check Whether You Are In Scope

Before you get too ahead of yourself, work out if and when you’re affected. 

To do this, you’ll need to measure your income on a gross basis across all property and sole-trader income. 

If you’re over £50,000, you are already in scope for 2026/27. Over £30,000 brings you in for 2027/28, and over £20,000 for 2028/29. 

Take the MTD Readiness Quiz

Optional: Sign Up Before You Are Mandated

If your start date is still ahead of you, you can sign up for MTD voluntarily. Signing up ahead of your mandated date lets you:

• Get comfortable with digital record-keeping now
• Test your systems before deadlines hit
• Avoid costly mistakes and penalties when your date arrives

Step 2: Find Your MTD Software

Choose MTD-ready software that can keep digital records, send quarterly updates and file the final declaration with a few quick clicks.

Landlord Studio is an MTD software for landlords. It gives you an all-in-one, HMRC-recognised solution built specifically for landlords. With our platform, you can:

• Keep digital records automatically for rent collection and expenses
• Generate the reports to ensure data accuracy with just a few clicks
• File quarterly submissions directly to HMRC
• Stay organised across multiple properties and income sources

Step 3: Sign Up for MTD 

HMRC’s guidance lets you sign up for MTD once you’ve chosen software. You can do it yourself, or an accountant can do it for you. 

If you have multiple income sources, each one needs to be set up in the service. If you are already in scope and have not signed up, do it now.

Download the Free MTD Preparation Checklist

The Safest Path Forward: Summary

Here’s what we recommend:

1. Check your threshold to confirm your MTD start date.
2. Choose your software. Landlord Studio is MTD-compatible and built for landlords like you.
3. Register without delay. If you are already in scope, you should be signed up and filing. If your date is 2027 or 2028, register before that tax year starts.

Related: How to Register for MTD for IT: A Step-by-Step Guide

How You Can Prepare for Digital Tax Returns

Plenty of landlords were understandably concerned about the introduction of digital tax returns. As one UK landlord vented on Reddit:

"Dreading this. I have no idea what's wrong with my trusty spreadsheet, and I am going to be forced to submit four tax returns a year.” — r/UKLandlords

Change is never easy, but digital tax returns are here. The best way to catch up is to set yourself up with effective, user-friendly MTD-compatible accounting software like Landlord Studio.

Why Landlord Studio Makes MTD Easy

Landlord Studio was designed specifically for landlords, so all the tools you need for MTD are already built in:

• Bank feeds for fast and easy reconciliation
• Receipt scanning on mobile
• HMRC-style expense categories by default
• Mileage tracking
• Customisable, tidy reports ready to export in seconds

Beyond accounting, Landlord Studio also helps you keep tenancy documents organised, including EPCs and gas safety certificates. Set reminders for renewals and automate simple emails, so admin doesn’t pile up.

Landlord Studio is HMRC-recognised and lets you submit your quarterly updates directly to HMRC with a few quick clicks.

Plus, invite your accountant to give them oversight of your accounts and ensure you’re maximising your deductible expenses and categorising everything correctly. 

Perfect for Multi-Property Landlords

Landlord Studio lets you track income and expenses for each individual property or room, giving you detailed, granular insights across your reports and dashboard. This level of precision is hard to achieve with general accounting software, which isn’t designed for managing multiple rental properties in one place.

You can also assign split ownership percentages per property. For example, own one property with a partner and another on your own. Assign ownership percentages for each property and Landlord Studio will calculate and report each owner’s share for your MTD submission. 

Reconcile monthly, monitor rent performance on your dashboard, and at the end of the quarter, you and your accountant have a clean, accurate digital ledger ready for MTD submission.

If you’re still using spreadsheets, with MTD live, now is the time to switch. Create your free Landlord Studio account today.