Making Tax Digital for landlords: What agents and landlords need to know

Making Tax Digital (MTD) for Income Tax comes into effect from 6 April, bringing major changes for landlords with qualifying income over £50,000. With thresholds set to reduce to £30,000 and £20,000 in future phases, many more landlords will be affected over the coming years.

For landlords and the agents who support them, early preparation is essential.

Who does Making Tax Digital apply to?

MTD for Income Tax applies to individual landlords whose gross income from property and/or self‑employment exceeds the relevant threshold.

Key points to be aware of:

• The £50,000 threshold is based on gross income, not profit
• Income is assessed per individual, including a landlord’s share of jointly owned properties
• Smaller landlords may still be affected as thresholds reduce in later phases

Although MTD starts in April, the first quarterly update isn’t due until August, giving landlords a short window to get their records in order.

What does Making Tax Digital mean for landlords?

Under MTD, landlords must:

• Keep digital records
• Use HMRC‑compatible software
• Submit quarterly updates to HMRC

While this represents a change for many landlords, particularly those still using spreadsheets or paper records, it also offers a practical opportunity to gain real‑time visibility over rental income, costs and cash flow, rather than relying on an annual tax return.

How can agents support landlords through MTD?

Agents don’t need to become tax experts, but they can add real value by:

• Helping landlords understand whether MTD applies to them
• Providing clear quarterly income and expenditure statements
• Encouraging conversations with professional advisers at the right time
• Ensuring ownership records are accurate, especially for jointly owned properties

This is particularly important where households have complex ownership structures, as MTD applies to each owner individually, which can easily be overlooked.

Turning MTD into better financial management

MTD is part of a wider shift towards greater professionalism in the private rented sector. With the right systems in place, landlords can benefit from:

• Clearer portfolio performance data
• Improved cash flow planning
• Faster, more informed decisions on rent reviews and investment

Rather than a compliance burden, MTD can become a catalyst for better‑run landlord businesses.

Speak to Bishop Fleming today

If you’re a landlord affected by Making Tax Digital - or expect to be in the future, our specialist team are here to help.