MTD ITSA for landlords — the April 2026 mandate explained.
From 6 April 2026, UK landlords with gross property income above £50,000 must keep digital records and file quarterly updates to HMRC under Making Tax Digital for Income Tax Self Assessment (MTD ITSA). This guide explains the rules, the deadlines and how to choose software you can actually trust with your filings.
The short answer
If your gross property and self-employment income for 2024–25 exceeds £50,000, you must keep digital records and file four quarterly updates plus a Final Declaration through MTD-compatible software from 6 April 2026. The threshold drops to £30,000 from April 2027 and to £20,000 from April 2028. The old separate End of Period Statement has been removed; the Final Declaration now does both jobs.
What landlords should do now
1. Who is affected and from when?
MTD for Income Tax Self Assessment applies to two groups of taxpayers:
- Self-employed individuals (sole traders and partners), and
- Landlords receiving UK property income.
The income test is based on the combined gross incomefrom these sources in the relevant year. HMRC uses the 2024–25 Self Assessment return to set the taxpayer’s status for April 2026.
The thresholds are gross— total rent received and total business turnover before any deductions. A landlord earning £36,000 of gross rent and £18,000 of sole-trader income is in scope from April 2026 even if their taxable profit is under £20,000.
2. Jointly owned property — how the threshold splits
For property held in joint names (commonly between spouses or civil partners), HMRC apportions the income for the threshold test according to beneficial ownership. A 50/50 split on a £90,000 rental flat puts each owner at £45,000 — below the £50,000 trigger for April 2026, but above the £30,000 trigger for April 2027.
If you have a Form 17 declaration in place to split income on an unequal basis, that split flows through to the MTD threshold test.
3. The quarterly update cadence
Under MTD ITSA, you submit four quarterly updates per income source per tax year. The default cadence aligns with the tax-year quarters:
- Q1: 6 April – 5 July — deadline 5 August
- Q2: 6 July – 5 October — deadline 5 November
- Q3: 6 October – 5 January — deadline 5 February
- Q4: 6 January – 5 April — deadline 5 May
You can elect to use calendar quarters(Q1 ending 30 June, etc.) if that aligns better with how your accountant operates — the election lives in your software and must be made before the first submission of the year.
Each quarterly update reports cumulative figures for the year to date — not just the quarter. Software handles the accumulation; you just review and approve.
4. The Final Declaration replaces SA — and the old EOPS
In 2024 HMRC confirmed that the planned separate End of Period Statement (EOPS) would be removed. Year-end adjustments now happen as part of the Final Declaration, which is due by 31 Januaryfollowing the end of the tax year — the same date the Self Assessment return used to be due.
The Final Declaration combines what used to be the EOPS and the SA return: confirm the cumulative figures, make accounting adjustments (capital allowances, basis-period adjustments, private-use add-backs), declare other income (employment, dividends, interest, pensions), and confirm the final tax position.
5. Digital records and digital links
HMRC’s digital-records rule means every individual transaction that contributes to the quarterly figure must exist as a digital record in MTD-compatible software. That covers:
- Each rent receipt (date, amount, property, payer)
- Each allowable expense (date, amount, supplier, category)
- Finance costs subject to the Section 24 restriction (held separately because they receive a 20% tax credit, not a deduction)
- Service-charge contributions where the rent is inclusive
- Mileage logs for travel to inspect properties (where claimed)
Just as important is the digital links requirement: the data flow from your bank or letting agent to your quarterly update must be electronic. Manual copy-paste from a PDF statement into a spreadsheet, then into the filing software, is not allowed once the digital-link enforcement is in full effect. Either pull bank data via open banking, import CSVs into software that preserves the source data, or use a letting-agent integration.
6. Exemptions and out-of-scope cases
Limited exemptions exist:
- Digital exclusion. If you cannot reasonably use digital tools because of age, disability, location (no internet) or religious belief, you can apply to HMRC for exemption.
- Below threshold. Combined gross income at or below the trigger for the relevant year.
- Trustees and personal representatives. Estates in administration are out of scope.
- Non-resident landlords taxed under the Non-Resident Landlord Scheme are deferred until further notice.
- Foreign property income only. UK MTD ITSA applies to UK property income; pure foreign-property cases follow a different timetable.
If you think you should be exempt, apply through HMRC well before the start of the tax year — backdated applications are possible but you may face penalty exposure in the gap.
7. Penalties
HMRC’s penalty regime for MTD ITSA uses two separate systems:
- Points-based late-submission penalties. Each missed quarterly update earns one point. At 4 points (for quarterly filers) you receive a £200 fixed penalty, then £200 for each further missed submission until you bring the record back into compliance.
- Late-payment interest and surcharges. Separate from late submission. Interest accrues from the due date; surcharges step up at 15 and 30 days late.
Reasonable-excuse defences and time-to-pay arrangements continue to apply.
8. Choosing MTD-ready software
Three things matter when picking software for MTD ITSA:
- HMRC recognition. Only software listed on HMRC’s published “Find software that’s compatible with Making Tax Digital” page can file. Check both the MTD VAT and MTD ITSA pages.
- Digital links from source to filing. Bank feeds, letting-agent integrations, or CSV import with no manual re-keying. Spreadsheets are fine if they are bridged to the software with a digital link.
- A clear quarterly cadence. The software should nudge you ahead of each deadline, show what changed since the last update, and produce a permanent record of every submission for HMRC enquiries.
9. Where SmartBooks fits
SmartBooks is MTD-compliant accounting software designed around a Smart Inbox: every receipt, rent statement and bank feed lands in one place, gets classified with a confidence score on every field, and rolls up automatically into your quarterly MTD update. A named bookkeeper or your own accountant reviews and approves before any submission goes to HMRC.
Current HMRC recognition status:SmartBooks has completed HMRC’s sandbox testing for MTD VAT and MTD ITSA, and production API credentials are with HMRC for review. Until they are granted, no live submission can or will be sent. We update the status the moment it changes — the canonical page is Trust & security.
If you’d like to be ready for 6 April 2026, the easiest next step is to start free and begin organising your digital records now.
Related guides
- SmartBooks vs Hammock — for UK landlords
- SmartBooks vs FreeAgent
- MTD ITSA April 2026 — what it means for firms — if you advise landlords as a firm
- Best MTD VAT software 2026 — picked by use case
- Switching from Xero to SmartBooks
- SmartBooks product overview
- For businesses and finance teams
- Trust & security — current HMRC recognition status
FAQ
Who has to comply with MTD ITSA from April 2026?
Self-employed individuals and landlords with combined gross income from self-employment and UK property above £50,000 in the 2024–25 tax year. The threshold falls to £30,000 from 6 April 2027, and to £20,000 from 6 April 2028. Joint property income is split between the parties for the purposes of the threshold test.
What counts towards the £50,000 threshold?
Gross income — not profit. For landlords this means total rent received before deducting expenses, mortgage interest or agent fees. For sole traders it means total business turnover. HMRC uses your 2024–25 Self Assessment return to set your status for April 2026.
What records do landlords need to keep digitally?
Every individual property-income transaction (rent received) and every allowable expense (repairs, agent fees, insurance, finance costs subject to Section 24 restriction, etc.), stored in MTD-compatible software with digital links to your quarterly update. Bank statements alone are not enough.
How often do landlords have to file under MTD ITSA?
Five returns a year, per income source. Four quarterly updates (covering 6 Apr–5 Jul, 6 Jul–5 Oct, 6 Oct–5 Jan, 6 Jan–5 Apr — though calendar-quarter elections are available) plus a Final Declaration that replaces the Self Assessment tax return.
Has the End of Period Statement (EOPS) been removed?
Yes. HMRC confirmed the removal of the separate EOPS in 2024. Adjustments now happen as part of the Final Declaration, which combines what used to be EOPS + SA into a single year-end submission.
Are there exemptions?
Yes — limited. People who are digitally excluded (no internet, no compatible device, religious objection, age- or disability-related reasons) can apply to HMRC for an exemption. Income below the threshold is also exempt. Trustees, executors, ministers of religion and some other narrow categories are also out of scope.
What are the penalties for non-compliance?
HMRC operates a points-based system for late submissions and a separate interest-and-surcharge regime for late payments. Each missed quarterly update earns one point; reaching the points threshold (4 points for quarterly filers) triggers a £200 fixed penalty, then £200 per further missed return until you bring the record back into compliance.
What should landlords look for in MTD-ready software?
Three things. (1) HMRC recognition for both MTD VAT and MTD ITSA — the published list lives on GOV.UK. (2) Genuine digital links from your bank or letting-agent statements through to the quarterly update — manual copy-paste does not meet HMRC's digital-link rules. (3) A clear quarterly cadence that nudges you ahead of each deadline.
A note on advice
This guide is general information about HMRC’s MTD ITSA rules and does not constitute tax advice for your specific situation. For advice, speak to a qualified UK accountant or tax adviser — the sister practice in the Rajoka portfolio, RR Accountants (ACCA-regulated), specialises in landlord and property tax.
Be ready before the first quarter closes.
Start free to prepare your records now, or book a demo if you want to walk through the MTD ITSA workflow first.