Making Tax Digital for Income Tax (MTD for IT) represents the biggest change to how landlords and self-employed individuals report income to HMRC in decades.
Instead of submitting one Self Assessment tax return each year, landlords within scope of MTD for IT will follow a new digital reporting cycle, built around quarterly updates and a Final Declaration.
This guide explains exactly how that new cycle works, what landlords are required to submit (and what they are not), and the key deadlines landlords and accountants need to diarise.
What is MTD for IT?
MTD for IT is part of HMRC’s wider Making Tax Digital programme. Its aim is to:
- Improve accuracy by requiring digital record-keeping
- Reduce errors caused by manual entry and paper records
- Give taxpayers a more up-to-date view of their tax position
For landlords, this means:
- Keeping digital records of rental income and expenses
- Sending quarterly updates to HMRC using MTD-compatible software
- Submitting a Final Declaration at the end of the tax year
For those within scope, the traditional Self Assessment annual tax return will be replaced by this digital process.
Who does MTD for IT apply to?
MTD for IT applies to UK landlords and self-employed individuals with qualifying income above certain thresholds.
Confirmed income thresholds
-
From 6 April 2026
Gross property (and/or self-employment) income over £50,000 -
From 6 April 2027
Gross income over £30,000 -
From 6 April 2028
Gross income over £20,000
“Gross income” means total income before expenses, not profit.
Landlords below £20,000 will remain outside MTD for IT unless they choose to join voluntarily.
The MTD for IT reporting cycle at a glance
Under MTD for IT, landlords follow a four-stage annual reporting cycle:
- Digital record-keeping throughout the tax year
- Four quarterly updates
- End-of-year accounting and tax adjustments
- A Final Declaration submitted to HMRC
Each stage plays a different role — and not everything submitted to HMRC is final or tax-determining.
1. Digital record-keeping: the foundation of MTD
MTD for IT requires landlords to keep records digitally. The timing for the creation of these records is not specified. The guidance from HMRC is: “You should create digital records as close to the date of the transaction as possible.”
This includes:
- Rental income recorded by date and amount
- Allowable expenses recorded digitally
- Records stored in MTD-compatible software
Paper records or standalone spreadsheets do not meet the requirements unless they are connected to HMRC-recognised software via a digital link.
For many landlords, this is the most significant change — but it also removes the need to reconstruct accounts months after the year has ended.
2. Quarterly updates: what they are — and what they are not
Quarterly updates are widely misunderstood, so it’s worth being clear.
What quarterly updates are
Quarterly updates are:
- High-level summaries of income and expenses
- Submitted digitally to HMRC
- Based on the records kept during the quarter
They provide HMRC with a running view of business activity across the year.
What quarterly updates are not
Quarterly updates are not:
- Tax returns
- Declarations of tax owed
- Final or complete figures
- Adjusted for accounting or tax reliefs
Landlords do not pay tax quarterly, and HMRC does not finalise the tax bill based on quarterly submissions.
Quarterly updates are informational, not determinative.
Quarterly update periods and deadlines
For landlords using the standard tax year (6 April to 5 April), the quarterly periods and deadlines are:
| Quarter | Period covered | Submission deadline |
|---|---|---|
| Q1 | 6 April – 5 July | 7 August |
| Q2 | 6 July – 5 October | 7 November |
| Q3 | 6 October – 5 January | 7 February |
| Q4 | 6 January – 5 April | 7 May |
Each quarterly update must be submitted by the 7th of the following month.
Missing a deadline counts as a late submission for penalty purposes.
Can landlords use calendar quarters instead?
Yes. MTD for IT allows landlords to opt into calendar-quarter reporting, which can be easier for those already managing finances monthly.
3. End-of-year adjustments (within your software)
After the fourth quarterly update has been submitted, landlords can make end-of-year accounting and tax adjustments within their MTD software.
This is where normal tax rules are applied, including:
- Accruals and prepayments
- Capital allowances
- Disallowable expenses
- Private-use adjustments
- Loss relief
There is no separate End of Period Statement (EOPS) under current MTD for IT rules. This requirement was removed as part of HMRC’s simplification of the regime.
All adjustments are finalised before submitting the Final Declaration.
4. The Final Declaration: replacing the Self Assessment return
The Final Declaration is the MTD for IT equivalent of the Self Assessment tax return.
It:
- Confirms that income and expenses for the year are complete and accurate
- Brings together all taxable income sources, not just property income
- Finalises the tax position for the year
This includes:
- Property income
- Self-employment income
- Employment income
- Dividends
- Savings interest
- Other taxable income
Once submitted, HMRC calculates the final tax liability in the same way as under Self Assessment.
Final Declaration deadline
The deadline for submitting the Final Declaration is:
31 January following the end of the tax year
For example:
- Tax year: 6 April 2026 – 5 April 2027
- Final Declaration deadline: 31 January 2028
This deadline aligns with:
- Income tax balancing payments
- Payments on account (where applicable)
How MTD for IT changes the landlord experience
While MTD for IT increases reporting frequency, it also removes several long-standing pain points.
Fewer year-end surprises
Because records are kept digitally throughout the year, landlords avoid:
- Rebuilding accounts months later
- Chasing missing invoices
- Relying on estimates
Clearer tax visibility
Although quarterly updates don’t create a tax bill, many MTD-compatible platforms provide:
- Running profit estimates
- Indicative tax forecasts
- Early warnings about cash-flow needs
Better collaboration with accountants
For landlords working with accountants, MTD for IT enables:
- Shared real-time access to records
- Fewer year-end questions
- Faster completion of final tax filings
What accountants need to know
MTD for IT significantly changes accounting workflows.
Key points for agents include:
- Quarterly updates can be submitted by the landlord or the agent
- Separate MTD authorisation is required (Self Assessment authority is not sufficient)
- Ongoing record quality becomes more important than year-end clean-up
- Client education is critical to avoid missed deadlines
Many firms are moving to quarterly engagement models to reflect the new reporting cycle.
What happens if a quarterly update is missed?
MTD for IT uses a points-based late submission penalty system, similar to MTD for VAT.
- Each missed deadline earns a penalty point
- Points expire after a period of compliance
- Financial penalties apply once a threshold is reached
The system is designed to encourage consistent compliance rather than penalise isolated mistakes — but repeated late submissions will lead to fines.
This new penalty regime has been waived until April 2027.
Getting ready for MTD for IT
Landlords and accountants should prepare by:
- Confirming when MTD for IT applies based on income
- Moving record-keeping into MTD-compatible software
- Diarising quarterly deadlines (7 Aug, 7 Nov, 7 Feb, 7 May)
- Agreeing who submits quarterly updates
- Building the Final Declaration into the annual tax process
Early preparation reduces risk and avoids disruption when MTD becomes mandatory.
Final thoughts
MTD for IT replaces the once-a-year Self Assessment return with a structured, digital reporting cycle.
- Quarterly updates are not tax returns
- Tax is finalised through the Final Declaration
- Digital record-keeping underpins the entire system
For landlords and accountants who prepare properly, MTD for IT can deliver better visibility, fewer surprises, and a smoother year-end process.
Want to see how MTD for IT works in practice?
See how landlords can submit MTD updates digitally →
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