According to the 2026 Spring Lettings Report produced by LRG, only 5% of landlords in England operate through limited companies.
This means that a significant 95% of landlords will be directly affected by the Making Tax Digital (MTD) changes.
If you own rental property in your personal name, this is a shift you cannot afford to overlook.
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Who does Making Tax Digital apply to?
MTD applies to:
* Landlords who own property in their personal name
* The self-employed
From April 2026, it will apply to those with a gross annual income of £50,000 or more.
This threshold will reduce over time:
* £30,000 from April 2027
* £20,000 from April 2028
As a result, a growing number of landlords will be brought into scope over the coming years.
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What are the new requirements?
Under MTD, the way you report your income and expenses will fundamentally change:
* You will need to submit quarterly updates to HMRC
* All submissions must be made digitally, using HMRC-approved software
* Updates must be submitted within one month of the end of each quarter
* A final declaration will still be required at the end of the tax year
This represents a move towards more frequent, real-time reporting — and significantly tighter deadlines.
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Software will be essential
To comply with MTD, you will need to use compatible software.
Suitable options include:
* Xero
* Dext Solo
For our managed clients, we offer a landlord-specific integrated MTD add-on service. This connects directly with our property management systems, meaning rental income and maintenance expenses are automatically recorded and prepared for submission — removing the need for manual data entry.
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Penalties for non-compliance
The new system introduces a points-based penalty regime:
* Missed submission deadlines result in penalty points
* Once four points are reached, a £200 fine is issued
* Late payment penalties are also increasing
Consistency and organisation will be key to avoiding unnecessary costs.
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What you need to do now
Preparation is essential — and leaving this until the last minute could create unnecessary stress.
We recommend taking the following steps as soon as possible:
* Register for MTD with HMRC
* Separate your rental income and expenses from personal finances (e.g. using a dedicated bank account)
* Choose and set up MTD-compliant software
This is not something to leave until the end of your first reporting quarter — early setup will make the transition far smoother.
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Final thoughts
Making Tax Digital represents a significant administrative shift for landlords operating in their personal name.
While it introduces more structure and transparency, it also requires a more proactive and organised approach to managing your finances.
Taking action now will put you in a strong position ahead of the 2026 rollout — and help you avoid unnecessary penalties or disruption.
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If you would like support setting up your systems or integrating MTD into your property management processes, our team is here to help.