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Making Tax Digital starts April 2026 for landlords earning over £50K. We debunk 8 common MTD myths from our expert webinar, explain what is actually required, and show you how to prepare without the stress.
Written by
Matt Hardy
PUBLISHED ON
Mar 3, 2026
Making Tax Digital (MTD) is less than five weeks away, and the myths are still flying. Will it increase your tax? Do you need to ditch spreadsheets? Is every landlord in scope? We break down the eight most common misconceptions so you can prepare with confidence.
Making Tax Digital (MTD) is HMRC's programme to move the UK tax system online. For landlords, it changes how you report your rental income and expenses, not how much tax you pay. The first phase begins on 6 April 2026 for landlords and sole traders with gross income above £50,000.
We recently hosted a live webinar with Kimberley Shapcott, a chartered accountant with the ICAEW who is also a landlord herself, to tackle the most common MTD myths head-on. Logan Ransley, co-founder of Landlord Studio, joined the conversation to share how the platform helps landlords manage the transition.
This guide distils that conversation into everything you need to know. No jargon, no scare tactics, just clear answers and practical next steps.
This is one of the most widespread misunderstandings. Many landlords believe that MTD replaces the annual tax return with four quarterly ones. That's not quite right.
Under Making Tax Digital, you will need to submit quarterly updates to HMRC showing your rental income and expenses. These are cumulative, meaning each quarter builds on the data from the previous one. But those quarterly updates are not tax returns. They are summaries of your income and expenditure, not a full calculation of tax owed.
After the four quarterly submissions, you still need to submit a final declaration. This end-of-year filing replaces what you currently know as the Self Assessment tax return for your property income. It is at this point that your tax is calculated, after accounting for reliefs, allowances, and adjustments.
The final declaration deadline remains 31 January following the end of the tax year, the same deadline landlords are used to for Self Assessment. The tax payment date stays the same too.
Not true. The April 2026 start date only applies to landlords (and self-employed individuals) whose gross income from property and self-employment combined exceeds £50,000.
A few important details to note here. First, it's gross income that counts, not profit. That means the total rent charged across all your properties, before deducting any allowable expenses. Second, if you're both a landlord and self-employed, those income sources are combined to determine whether you meet the threshold.
Third, properties held in a limited company are completely outside the scope of Making Tax Digital. If all your properties sit in a company structure, MTD does not apply to you. If some are in a company and some are held personally, only the personal rental income counts towards the threshold.
The thresholds will come down over time. Landlords with gross income above £30,000 are expected to come into MTD from April 2027, and those above £20,000 from April 2028. Anyone below £20,000 stays on the existing Self Assessment system for now.
Each person is assessed individually. If you and your spouse jointly own properties generating £35,000 in total rent on a 50/50 split, each of you has gross income of £17,500. Neither of you would currently be in scope. But a 70/30 split on £60,000 of rental income would put the majority partner at £42,000, still below the threshold, while the minority partner would be well outside it at £18,000.
You can still use spreadsheets to record your income and expenses. However, there's a catch.
MTD requires that data is submitted to HMRC digitally through compatible software. If you use a spreadsheet, you'll need separate bridging software to connect your spreadsheet to HMRC's systems via their API. That means maintaining your spreadsheet and paying for additional software just to file.
The cost of bridging software is likely similar to the cost of purpose-built landlord accounting software, which gives you far more functionality: bank feeds, automated expense categorisation, receipt scanning, and built-in quarterly submissions. For most landlords, the spreadsheet-plus-bridging approach creates more work for no clear saving.
If you work with an accountant, they may be able to handle the bridging for you. But if you're filing yourself, switching to MTD-ready software will save you time and headaches compared to bolting bridging software onto a spreadsheet system.
This one causes the most anxiety, so let's be direct: Making Tax Digital does not change how your tax is calculated. It changes how you report your income and expenses. You're sending the same information to HMRC, just more frequently and through digital channels.
Your tax is still calculated on the full year's income minus allowable expenses, exactly as it is now. The quarterly updates build up a cumulative picture throughout the year, and the tax calculation happens at the final declaration stage, after all adjustments have been applied.
Payment schedules are also unchanged. If you currently pay tax in six-monthly instalments, that continues. If you pay annually, that stays the same. HMRC has confirmed there are no plans to introduce quarterly tax payments alongside quarterly reporting.
Your accountant can support you with MTD, and most are preparing to do so. But the level of involvement, and the cost, will vary depending on how much you want them to do.
During our webinar, Kimberley described a spectrum she's seeing among her landlord clients. At one end, some landlords plan to handle quarterly submissions themselves and only involve their accountant for the final declaration and year-end tax planning. At the other end, some want their accountant to manage the entire process, including quarterly filings. The latter approach will almost certainly cost more.
One critical point: if you currently file your Self Assessment through HMRC's online system, you will not be able to do that under MTD. The final declaration must be submitted through compatible software. Even if your accountant handles the quarterly updates, you need software in place.
This is partly true, but worth clarifying. Making Tax Digital moves landlords who meet the income thresholds onto a new system for reporting property income. The quarterly submissions and final declaration replace the property income section of your Self Assessment return.
But if you have other sources of income, such as pension income, dividends, PAYE salary, or interest, those are still reported through the final declaration process, not in the quarterly updates. The Self Assessment system as a concept is evolving, not disappearing entirely.
HMRC has been testing the new system for around two years, so many of the early technical issues have already been identified and resolved. The transition should feel manageable for most landlords, particularly those using MTD-compatible software from the outset.
HMRC has confirmed a soft landing approach for the first year. If you're making a genuine effort to comply, you will not face penalties in the 2026/27 tax year. However, doing nothing at all is not an option.
In practical terms, even if you haven't set everything up by 6 April 2026, you have some breathing room. Your first quarterly submission isn't due until 7 August 2026, covering the period from 6 April to 5 July. That gives you four months from the start date to get your software set up, bank feeds connected, and records in order.
That said, the earlier you start, the less stressful it will be. Getting set up in March or April means you're recording from day one rather than scrambling to reconstruct three months of transactions in July.
If your gross property income is below £50,000 right now, you're not in scope for April 2026. But that doesn't mean you can forget about MTD entirely.
The thresholds are coming down. From April 2027, the threshold drops to £30,000. From April 2028, it falls to £20,000. And HMRC has indicated that a £10,000 threshold may follow after that.
Beyond falling thresholds, there's a simpler reason your situation could change: rent increases. Even a modest rent increase on one property can push you over a threshold you thought was safely above you. If you have multiple properties, the cumulative effect of annual increases adds up quickly.
The key is not to avoid rent increases to stay below a threshold, that would be financially counterproductive. Instead, stay informed so you're not caught off guard when your turn comes.
No. Pension income, PAYE salary, dividends, and interest are reported on the final declaration, not in the quarterly updates. HMRC has indicated that the new system will pre-populate income it already knows about, such as PAYE earnings, to simplify the process.
These are allowable expenses. MTD-compatible software should have categories for service charges, ground rent, and letting fees that map to HMRC's required expense categories. Record them as you incur them throughout the year.
You cannot amend a submission that has already been filed. But because the system is cumulative, you can correct errors in the next quarter's submission. If you realise an expense was wrongly categorised or a figure was incorrect, adjust it in the following quarter and it will flow through to the final declaration correctly.
Landlord Studio handles everything in one place. You record your income and expenses in the app, and submit directly to HMRC from within the software. No additional bridging software is needed.
If you've lent money to your limited company and receive interest on it, that interest is personal income. It doesn't go into the quarterly property submissions. Instead, you report it on the final declaration alongside any other non-property income.
Making Tax Digital doesn't have to be stressful. Landlord Studio is built for UK landlords who want to stay compliant without the complexity. Track your rental income and expenses in one place, automate your bookkeeping with bank feeds, and submit quarterly updates directly to HMRC from within the app.
Your accountant can access your data through their own dashboard, making collaboration straightforward. And with plans starting at £12 per month, it costs less than a single hour of accountant time.
Start your free 14-day trial today and see how simple MTD compliance can be. The earlier you set up, the smoother April will feel.
This post is based on a live webinar hosted by Landlord Studio featuring Kimberley Shapcott, chartered accountant and ICAEW member. The information reflects guidance as of February 2026 and is intended for general informational purposes only. Please consult a qualified tax professional for advice specific to your circumstances.
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Landlord Studio is an easy to use MTD compliant property management and accounting software designed for UK landlords.
Track income and expenses, run reports,, find and prescreen tenants, manage property maintenance, and more.
Making Tax Digital is coming for UK landlords, and the noise around it is louder than ever. This free live webinar cuts through the myths to explain what’s really changing, what HMRC actually expects, and how to prepare calmly and confidently for April 2026.
Hosted by: Logan Ransley, Co-Founder at Landlord Studio
Guest: Kimberley Shapcott, Owner at Shapcotts Accountants
Duration: 45 minutes + Live Q&A, Live Webinar
When: 📅 Thursday, 26th February 2026 🕛 12:00 PM GMT ⏱️ 45 minutes (includes live Q&A)
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