Making Tax Digital (MTD) is a UK government initiative aimed at modernizing and streamlining the process of tax reporting and record-keeping for individuals and businesses. It requires businesses, including landlords, to maintain digital records of their income and expenses and use compatible accounting software to submit their tax returns to Her Majesty's Revenue and Customs (HMRC).

MTD for Income Tax rules will apply to all landlords whose combined property and/ or business income is £50,000 or more a year. For these landlords, MTD for Income Tax will replace the current process of completing an annual Self Assessment tax return from 6th April 2026.

Landlords with a combined property and/or business income of £30,000 or more per year will have to follow the rules from April 2027.

Under these rules, HMRC will require use of software to:

• keep digital records for property and/or business income and expenses

• keep digital records for property and/or business income and expenses

• finalize property and/or business income• finalize property and/or business income by submitting an end of period statement (EOPS) and final declaration to HMRC

The main goals of Making Tax Digital are to reduce errors in tax reporting, improve efficiency, and provide individuals and businesses with a better understanding of their tax obligations in real-time. By digitizing tax records and reporting, the UK government aims to make the tax system more accurate and easier to manage for both taxpayers and HMRC.

It's important to note that tax regulations and initiatives may be subject to change, so it's advisable to check the latest updates from HMRC for the most current information on Making Tax Digital for landlords.

Ayiza for landlords

If you’re a landlord and you’re going to be affected by MTD for Income Tax, you can use Ayiza for Landlords to stay compliant with the new rules.