The 2025 Spring Budget announced a reduction in the income threshold for Making Tax Digital (MTD), meaning that from April 2028, those earning over £20,000 will be required to comply. If you are a landlord, be sure to work with experienced property accountants to make sense of these changes and avoid penalties.
What is Making Tax Digital?
Introduced by the Finance Act in 2017, MTD requires individuals and businesses to keep digital tax records and file updates electronically. The regulations have steadily expanded since then.
From April 2026, MTD for Income Tax Self-Assessment (ITSA) will apply to landlords and self-employed individuals with gross property or business income above £50,000. The threshold will reduce to £30,000 in April 2027 and to £20,000 in April 2028.
What are the requirements?
- Keep digital records: Paper records will no longer be accepted. Property owners must digitally record income and expenses such as mortgage interest, management fees, repairs, and maintenance costs.
- Use MTD-compliant software: Your records must be maintained using software that can connect directly to HMRC’s system.
- Submit quarterly updates: You must report your income and expenses every quarter, rather than just once a year.
- File an End of Period Statement (EOPS): At the end of the tax year, you will need to reconcile your quarterly reports and confirm your claims for allowances.
- Make a Final Declaration: A final submission to HMRC will confirm your overall tax position for the year.
Allenby Accountants can help
Work with our experienced property accountants to make this transition much easier.
Our property accountants help landlords stay compliant with real-time income tracking, accurate expense reporting, and smart mortgage management. We make sure that you stay ahead of new regulations and avoid unnecessary stress.
If you would like expert support navigating Making Tax Digital, speak to our property accountants today. Call 0208 914 8887 to book a consultation or visit our website to request a callback.
