Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) represents a significant shift in how individuals, including landlords, must report their income and manage their tax affairs.

MTD for ITSA is a part of the Government’s broader Making Tax Digital programme, aimed at transforming the UK tax system into one of the most digitally advanced systems globally.

Whilst it’s currently only focused on unincorporated businesses, self-employed individuals and landlords, the Government has indicated that a similar scheme to MTD for ITSA will eventually apply to limited companies and Corporation Tax as well.

For Income Tax though, taxpayers will need to use digital software to keep records and submit updates to HM Revenue and Customs (HMRC).

Starting from 6 April 2026 (or 6 April 2027 depending on your income), you will be required to adopt MTD for ITSA if you meet the following criteria:

• You are registered for Self-Assessment.
• Your income stems from self-employment, property, or both.
• You do not qualify for an exemption.
• Your total qualifying income exceeds £50,000 (or £30,000 after April 2027).

As you can see, your obligation to sign up for this scheme will vary based on your total qualifying income – including earnings from property.

The difficulties that MTD for ITSA creates

Landlords are going to face several challenges in adapting to MTD for ITSA.

The transition demands a shift from paper-based or simplistic digital records to a fully digital, MTD-compliant, software-based system.

Managing this change, alongside the regular demands of property management, could present you with a considerable burden.

Not only must you now learn new systems and processes, but you may also face hidden costs.

Such investments, both in time and money, add to the challenges that you, as a landlord, already face.

How to make MTD for ITSA easier

We’re recommending cloud accounting as a solution for our landlord clients who are worried about navigating the complexities of MTD for ITSA.

Cloud accounting software enables you to maintain digital records and perform transactions online all while remaining MTD compliant.

Fundamentally, it offers real-time data access, which is essential for accurate and timely submissions under MTD for ITSA.

It is also inherently scalable, allowing for adjustments as your portfolio grows or diversifies and only requires one initial investment in the technology – rather than numerous additional costs.

Cloud accounting also reduces the likelihood of errors and enables you to manage your finances more efficiently in a real-time situation.

Beyond these benefits, the use of the right cloud accounting software can help to:

• Monitor your property expenses in real time and reconcile rent payments
• Log your taxable income and expenses to create accurate reports for self-assessment
• Give a broader view of your portfolio performance, such as loan to value, rental yields, arrears balance and occupancy rates.

For our recommendations on cloud-accounting software for landlords, please get in touch.