Landlords across the UK are being urged to brace for a significant change to how they manage their tax obligations, as HMRC rolls out a major update to the self-assessment system.

From 6 April 2026, individuals earning more than £50,000 from property income or self-employment will be required to submit their income and expenses to HMRC every quarter under the government’s Making Tax Digital (MTD) for Income Tax initiative.

This transformation is part of HMRC’s wider push toward digital tax reporting, aiming to modernise and streamline the process for millions of taxpayers. However, while the move promises efficiency and improved accuracy, it also introduces new complexities for many landlords, especially those who have traditionally only submitted an annual tax return.

What is changing?

The introduction of MTD for Income Tax means that affected individuals will no longer be able to wait until the end of the financial year to compile and report their earnings. Instead, they’ll need to keep digital records and use HMRC-approved software to send quarterly updates.

These will be in addition to the usual annual self-assessment tax return, which will remain in place to finalise the year’s tax position.

The initial wave, coming into effect in April 2026, will apply to sole traders and landlords with gross income exceeding £50,000.

One year later, in April 2027, those with gross income between £30,000 and £50,000 will also be brought into the scheme.

By 2028, the system is expected to include those earning over £20,000.

Gross income – Not net profit

A key detail that may catch people off guard is that the threshold for MTD is based on gross income, not net profits. That means if your rental income exceeds the threshold before expenses are deducted, even if your profit margins are slim, you’ll still be subject to the new requirements.

This has raised concerns among professionals, as many smaller landlords may not realise they fall within scope.

The administrative burden

Currently, landlords typically report rental income once a year through their self-assessment return. Under the new regime, they’ll be expected to report four times per year using digital tools, plus complete the traditional year-end return to reconcile their figures.

While HMRC argues that spreading the reporting load across the year will reduce year-end stress, many experts warn that the transition may be far from seamless for those unprepared or unfamiliar with digital accounting tools.

Why is this happening?

HMRC claims the move to quarterly digital reporting will enhance accuracy, reduce tax return errors, and help taxpayers maintain better control over their obligations. By tracking income in real time, individuals will also have a clearer view of their financial position throughout the year.

However, critics point out that the benefits will only materialise for those who adapt quickly and have access to suitable tools and support. For many landlords, especially those who manage properties as a side income or have limited digital skills, there may be added costs, complexity, and a steep learning curve.

How Williamson & Croft can help

At Williamson & Croft, we understand that transitioning to quarterly digital reporting can be daunting. That’s why we’re here to help you every step of the way.

Our team of experienced accountants can guide you through the process, help you choose HMRC-approved software, set up digital record-keeping systems, and manage your quarterly submissions to ensure you stay fully compliant.

We also offer training and ongoing support, so whether you’re a seasoned landlord or just starting out, you’ll have peace of mind knowing your tax affairs are in expert hands. With our help, you can focus on your property business while we handle the numbers.

Start preparing now

While MTD for Income Tax won’t be mandatory until April 2026 for higher earners, preparing early is highly recommended.

HMRC is encouraging individuals to join its MTD pilot programme, allowing them to familiarise themselves with the system and iron out issues ahead of the deadline.

Don’t wait until the last minute to make the switch. Early adopters benefit from more time to adjust and fewer headaches when the new rules come into force.

Let us help you get MTD-ready

If you’re a landlord unsure about what the MTD changes mean for you, or if you’d like help getting started, contact us today for a free consultation.

We’ll help you understand your obligations, set up your software, and ensure a smooth transition, so you can stay focused on growing your rental income.