As April 2026 approaches, many landlords are starting to hear more about Making Tax Digital and how it may affect the way rental income is reported.
For some, the changes may feel unfamiliar at first. For others, they may simply raise practical questions about what will need to be done differently. In reality, Making Tax Digital introduces a gradual shift in how rental income is reported, and with the right preparation, it does not need to be complicated.
At Lovelle, we understand the importance of clear, straightforward guidance. This guide explains what is changing, who it applies to, and how landlords can approach the new system calmly and practically.
Why rental income reporting is changing
To understand what is changing, it helps to start with why Making Tax Digital is being introduced.
Making Tax Digital is part of HM Revenue & Customs’ wider plan to modernise the tax system. At present, many landlords submit rental income information once a year through Self Assessment. Under the new system, HMRC wants income and expenses to be recorded digitally and shared more regularly during the year.
It is important to note that this change is about how information is reported, not about landlords paying more tax.
When Making Tax Digital starts to apply
Making Tax Digital for Income Tax will be introduced in stages, based on qualifying income in a tax year.
If your qualifying income from property and/or self-employment was over £50,000 for the 2024 to 2025 tax year, you will need to use Making Tax Digital from 6 April 2026.
HMRC has confirmed that the threshold will reduce over time:
- If the qualifying income is over £30,000 for the 2025 to 2026 tax year, Making Tax Digital will apply from 6 April 2027
- The government has set out plans to lower the threshold to £20,000 in a later phase, subject to legislation
What this means for landlords
Once a landlord falls within scope, the most noticeable change is how records are kept during the year.
Instead of gathering everything together at the end of the tax year, rental income and allowable expenses will need to be recorded digitally as they arise.
During the year, quarterly updates will be sent to HMRC using compatible software. These are not tax bills, but simple summaries of income and costs so far.
At the end of the tax year, landlords will still complete a final submission, and the usual Income Tax payment deadline of 31 January will remain unchanged.
What counts as qualifying income?
At this stage, it is helpful to understand how HMRC decides who needs to follow the new rules.
Qualifying income is based on gross income before expenses are deducted. For landlords, this includes rental income and, where relevant, self-employment income. This means landlords with more than one income source may reach the threshold sooner than expected.
Properties held through limited companies are not included under these Income Tax rules, as companies follow Corporation Tax reporting instead.
Do landlords need new software?
Because reporting becomes digital, suitable systems are essential.
HMRC will not provide its own software for Making Tax Digital. Landlords will need to use MTD-compatible software to keep records and send updates correctly. Some landlords may choose to manage this themselves, while others may prefer support from an accountant or adviser.
Exploring these options early can help avoid unnecessary pressure later.
Simple steps that can help you prepare
The good news is that preparation does not need to be complex.
Keeping rental records clear, making sure expenses are logged accurately, and reviewing income levels against the threshold can all help make the transition smoother.
Starting early allows changes to be made gradually, rather than feeling rushed as April 2026 approaches.
Support for landlords as reporting requirements change
Making Tax Digital introduces a new way of reporting rental income from April 2026 for landlords above the relevant qualifying income threshold.
Lovelle supports landlords with professional property management, clear rental documentation, and informed guidance to help keep reporting organised as requirements evolve. If you would like advice on preparing for Making Tax Digital, speak to your local Lovelle branch.
