Making Tax Digital for Income Tax Self Assessment moves from theory to lived reality in April 2026. For higher-earning landlords, this is not a tweak to Self Assessment. It is a structural change to how rental income is recorded, reviewed and reported to HMRC.

What catches many people out is timing. Entry into MTD in 2026 is determined by income earned in 2024/25. By the time letters arrive, the die is already cast.

Who actually falls into MTD in April 2026

From 6 April 2026, unincorporated landlords with more than £50,000 of combined gross property and self-employment income must comply.

Only income taxed in your own name counts. PAYE salary, pensions and limited-company rental profits sit outside the test. For jointly owned properties, each owner looks at their own share of the rent. It is common to see one spouse pulled into MTD while the other remains outside.

What replaces the old Self Assessment return

Once in MTD, the familiar HMRC online Self Assessment return disappears.

Instead, landlords must:

• Keep digital records of income and expenses.
• Submit quarterly updates via MTD-compatible software.
• File a single year-end Final Declaration to confirm totals and claim reliefs.

The Final Declaration is the functional replacement for the old tax return, but it sits on top of four quarterly submissions rather than standing alone.

How quarterly reporting works in practice

Quarterly updates are not full tax returns, but they are not nothing either. They are summaries of income and expenses for each quarter, submitted within one month of quarter-end.

What we typically see is that landlords underestimate the discipline required. Transactions need to be captured regularly, not reconstructed months later. Spreadsheets are still permitted, but only if linked to HMRC through bridging software. A standalone spreadsheet is no longer enough.

Penalties and the new points system

Late filing under MTD uses a points-based system. Each missed quarterly update or Final Declaration earns a point. Reach the threshold and a fixed financial penalty applies.

Late payment penalties are layered on separately, increasing the longer tax remains unpaid. The structure is designed to nudge compliance early rather than punish occasional slips, but once points accumulate they are slow to clear.

The threshold trap many landlords miss

One of the more awkward dynamics is the £50,000 entry test.

Landlords sitting around £45,000–£55,000 of income in 2024/25 may find that a rent review, a short-term let, or a small side trade pulls them into MTD a full year earlier than peers. By the time this becomes obvious, there is no planning lever left to pull.

In my time reviewing these cases, the frustration is rarely about tax. It is about process arriving sooner than expected.

2026 as a rehearsal, not the end state

The government has been clear about direction of travel.

• April 2026: £50,000 threshold.
• April 2027: £30,000 threshold.
• April 2028: planned drop to £20,000.

That trajectory tells us this is not a policy aimed only at large portfolios. It is a gradual normalisation of quarterly digital reporting for most active landlords. 2026 is simply the first large-scale test.

What tends to change for landlords on the ground

The biggest shift is behavioural rather than technical.

Quarterly reporting forces closer attention to cash flow and tax exposure throughout the year. For some, that improves decision-making. For others who have treated property as a passive sideline, it feels intrusive and time-consuming.

The landlords who adapt best are usually those who accept that administration is now part of the cost of staying unincorporated.

A grounded way to weigh this up

If I were facing MTD entry in 2026, I would treat this less as a compliance hurdle and more as a systems decision. Software choice, record-keeping habits and support arrangements matter more than the mechanics of the rules themselves. The direction is clear, the thresholds are falling, and the earlier the process feels routine, the less disruptive it becomes when MTD stops being optional for almost everyone.