Landlords And MTD What Digital Records You Need Today To Be Ready For The New Rules Coming In 2026
- bes Accountancy Services
- 6 days ago
- 6 min read
For many landlords, tax reporting has traditionally meant gathering paperwork once a year and dealing with Self Assessment near the deadline. That approach is becoming much harder to sustain. From 6 April 2026, landlords and sole traders with qualifying income over £50,000 from self-employment and property will be required to use Making Tax Digital for Income Tax. That means keeping digital records, using compatible software, sending quarterly updates, and completing an end of year submission through the new process.
For landlords across Barnet, Finchley, Enfield, Muswell Hill, Highgate, Hampstead, Camden, Islington and surrounding north London areas, the key issue is not just whether MTD is coming, but whether their records are ready for it. Getting organised now can reduce errors, improve visibility over rental income, and make the 2026 transition far smoother. HMRC also says landlords can sign up early on a voluntary basis before they become mandatory users, which gives some taxpayers a chance to prepare in advance.
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Here is what landlords need to understand now:
Who MTD for Income Tax Will Affect First
From 6 April 2026, MTD for Income Tax becomes mandatory for landlords and sole traders whose total annual qualifying income from self-employment and property exceeds £50,000. HMRC has also confirmed a later expansion to those over £30,000 from April 2027, and the government has published a further reduction to £20,000 from April 2028.
What Landlords Will Need to Do
Under MTD for Income Tax, landlords will need software that can:
create and store digital records
send quarterly updates to HMRC
submit the tax return using compatible software
support the year-end process and payment deadlines
Why Digital Record-Keeping Matters Now
Even if you are not yet within the 2026 threshold, digital record-keeping is the foundation of the new system. HMRC’s guidance makes clear that digital records are not optional once you are mandated. The earlier landlords move away from scattered spreadsheets, paper folders, or last-minute manual summaries, the easier it becomes to adapt.
Want to dive deeper into accounting for businesses?
Read our related blog, where we provide a full guide to submitting your File Your Tax Return Early.
What You Need to Get Right for MTD Compliance
Here is a practical checklist of the digital records landlords should have in place now:
Property Income Records
HMRC says landlords need digital records of property income, including rent and certain lease-related amounts such as premiums, reverse premiums, and inducements where relevant. Each income entry should capture the amount, the date, and the relevant category.
Property Expense Records
Landlords also need digital records of property expenses, which may include repairs, maintenance, and other property-related costs. Again, the records should show the amount, date incurred, and category. HMRC states that MTD for Income Tax uses the same broad categories of income and expenses as Self Assessment.
Compatible Software
It is not enough to keep notes in isolation. You will need software that works with MTD for Income Tax so records can be stored, corrected where needed, and submitted to HMRC through the required digital process. HMRC provides guidance on finding compatible software and choosing features that match your needs.
Quarterly Update Readiness
MTD is not just about a year-end filing. The system requires quarterly updates during the tax year. That means landlords need more regular bookkeeping habits, not just annual catch-up work. Digital records need to be current enough to support those submissions.
Reviewing Special Cases
HMRC’s digital record guidance also highlights situations involving the Rent-a-Room Scheme and mixed income positions. In some cases, landlords with both property income and side-hustle or self-employment income may need to keep digital records across both activities, depending on thresholds and what was reported previously.
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Common MTD Mistakes Landlords Should Avoid
Here are some of the most common mistakes BES Accountancy would expect landlords to make if they leave preparation too late:
Assuming MTD Is Only a Filing Deadline Change
MTD is more than a new deadline. It changes the underlying reporting process by requiring digital records, quarterly updates, and compatible software. Landlords who think they can continue with annual paper-based summaries are likely to struggle.
Waiting Until 2026 to Organise Records
Many landlords will only discover weaknesses in their bookkeeping when they try to prepare quarterly figures. Starting now makes it easier to create cleaner rental records, standardise categories, and choose the right software before the rules become mandatory. HMRC expressly allows voluntary sign-up ahead of mandatory entry dates.
Using Incomplete or Non-Digital Information
Scattered bank statements, handwritten notes, and missing expense evidence are already risky under Self Assessment. Under MTD, they become even more problematic because the records need to be created and stored digitally in a form compatible with the reporting process.
Forgetting That Property and Self-Employment Income May Be Combined
HMRC’s threshold test looks at total annual qualifying income from self-employment and property, not just one source in isolation. A landlord with freelance or side-business income may reach MTD sooner than expected.
Assuming There Is No Penalty Risk in the New System
HMRC says that for taxpayers required to join from 6 April 2026, it will not apply penalty points for late quarterly updates in the first tax year, 2026 to 2027. However, penalties can still apply for late tax returns and for late payment of tax. So a soft landing on quarterly updates does not remove the need for proper compliance.
For official employer guidance, it is helpful to review HMRC’s payroll information on GOV.UK: PAYE and payroll for employers.
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Next Steps: How BES Accountancy Helps North
London Landlords Get Ready
As MTD for Income Tax approaches, landlords need more than generic advice. They need practical support to turn incomplete records into a workable digital process.
Digital Record Review and Clean-Up
BES Accountancy can review your current rental records, identify gaps, and help you move to a cleaner digital structure that supports quarterly reporting and year-end tax compliance.
Software Support for Landlords
As a firm certified on Xero and QuickBooks, BES Accountancy can help landlords choose and implement software that supports compliant record-keeping and smoother reporting workflows.
Support for Landlords with Mixed Income
If you have rental income alongside self-employment, freelance work, or other taxable income, BES Accountancy can help you assess whether the MTD threshold applies and how your reporting should be structured. HMRC says the relevant test is based on your combined annual qualifying income from self-employment and property.
North London Landlord Support
This topic is especially relevant for landlords in Barnet, Finchley, Enfield, Muswell Hill, Highgate, Hampstead, Camden and Islington, where many individuals manage one or more rental properties while also working as sole traders, consultants, or company directors. BES Accountancy can help these clients prepare early, reduce admin pressure, and stay compliant as the rules change.
If you are a landlord in north London and want to get ready for Making Tax Digital before the 2026 rules begin, contact BES Accountancy for a free consultation. We will help you understand whether MTD applies to you, what digital records you need to keep, how to organise your rental income properly, and how to move to a more efficient and compliant system.
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About BES Accountancy
Founded in twenty twenty and based in London, BES Accountancy helps businesses and self employed professionals across the UK with bookkeeping, payroll, VAT, financial accounting, and accounts preparation for sole traders and partnerships. We work with Xero and QuickBooks and our values are availability, efficiency, trust.
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