Landlords – are you ready for Making Tax Digital? (MTD)

Landlords – are you ready for Making Tax Digital? (MTD)

April 2026 may seem far off, but we’re here to help you stay ahead of the curve and ensure you’re fully prepared well in advance! 

What Is Making Tax Digital (MTD)? 

Making Tax Digital (MTD) is a government initiative requiring landlords and businesses to submit their tax information to HMRC quarterly, rather than just annually. The aim is to transition all financial data to a digital format, reducing manual intervention and making the process more efficient. This move also helps HMRC provide taxpayers with more accurate estimates of their tax liabilities, enabling you to better manage your tax planning. 

What Should You Do in the Lead-Up to MTD? 

1. Set Up a Separate Bank Account 

If you’re not already using a separate bank account for your property income, now’s the time to start. Having a dedicated account will streamline your bookkeeping and accounting, making it easier to track cash flow. For individual landlords, a personal account is fine, but it’s a good habit to separate business and personal finances. 

2. Start Using MTD-Compatible Accounting Software 

I know accounting software can feel overwhelming, especially if you only manage a small property portfolio, but once you get started, you’ll wonder how you ever managed without it! Getting an expert to set you up and provide free training is a great way to ease into it (yes, LoftyAccounting offers free Xero training to our clients!). You’ll be surprised how quickly you get the hang of it. 

If you prefer extra support, consider hiring a bookkeeper once a quarter to help process your data. Bookkeeping services start at just £90 per quarter and can even handle your quarterly MTD submissions when the time comes. 

For those who currently hand over a spreadsheet or a bag of receipts to your accountant each year—this will soon be a thing of the past! 

The sooner you get set up with digital accounting, the better prepared you’ll be for the transition to quarterly submissions. 

3. 2024/2025 Tax Return 

You’ll still need to submit your 2024/2025 tax return by 31st January 2026 as usual. HMRC will review this and determine if your income exceeds the £50,000 threshold (the limit for 2026, which will drop to £30,000 in 2027). If your qualifying income exceeds £50,000, you’ll need to comply with MTD for Income Tax starting from 6th April 2026. 

How to Register for MTD  

You can register for MTD in two ways—either yourself or through your accountant. 

1. Register Yourself 

If you normally handle your Self-Assessment, you can self-register for MTD through the HMRC website. Make sure you have the following ready: 

Your National Insurance number 

Your Government Gateway ID and password 

MTD-compatible software (which you’ll need to link to your HMRC account) 

2. Let Your Accountant Handle It 

If you’d prefer to have someone take care of it for you, get in touch with your accountant—or LoftyAccounting if you’re looking for one! We’ll ensure you’re up and running and MTD-compliant in no time. 

How can LoftyAccounting help?

Here at LoftyAccounting we are specialist-chartered accountants for the property industry. Our staff are not only qualified accountants, but also ARLA qualified too. So, when we say we understand the letting industry – we really do! Our approach to everything we do is pro-active and accurate from the start. Our personable staff is what sets us out from the rest, get in touch today for a free online consultation – we would love to meet you!