HMRC’s New MTD for Income Tax Starts in April 2026: What Landlords and the Self-Employed Need to Do Now

For many landlords and self-employed people, tax has always meant one main rush each year.
That is changing.

From 6 April 2026, HMRC’s new Making Tax Digital for Income Tax (MTD ITSA) rules begin for many sole traders and landlords. If you are affected, you will no longer be able to just leave everything until the end of the tax year. Instead, you will need to keep digital records and send quarterly updates to HMRC using compatible software.

This is a major shift, and many people are still underestimating how much work, organisation and accuracy it will really require. That is exactly why now is the right time to get proper help.

What Is HMRC’s New MTD for Income Tax From April 2026?
From 6 April 2026, many landlords and self-employed people with qualifying income over £50,000 must keep digital records and send quarterly updates to HMRC using compatible software.

HMRC’s test is based on your qualifying income, which means your gross income from self-employment and property before expenses, not your profit. If your combined qualifying income is above £50,000 for the 2024/25 tax year, you may need to join MTD for Income Tax from 6 April 2026.

This is not just a software change. It is a new reporting habit, a new compliance system and, for many people, a new source of pressure unless it is set up properly from the beginning.

Who Will Be Affected First?
From 6 April 2026, MTD for Income Tax applies to sole traders and landlords whose total qualifying income from self-employment and property is over £50,000 based on the 2024/25 tax year. From 6 April 2027, the threshold drops to over £30,000 based on the 2025/26 tax year, and HMRC has also said that those with qualifying income over £20,000 will be brought in from 6 April 2028.

This means:

• a landlord with gross rents over £50,000 may be in
• a self-employed person with sales over £50,000 may be in
• someone with both rental income and self-employed income may be in even if neither one alone is over £50,000, because HMRC looks at the combined total

One of the biggest misunderstandings is this: 

HMRC is looking at gross income, not profit.

So if you earn £28,000 gross from self-employment and £24,000 gross from property, your combined qualifying income is £52,000, which means you are likely in scope from April 2026.

What Will You Actually Have To Do?
If you are caught by the new rules, you or your agent will need to use MTD-compatible software to:

• create and keep digital records
• record self-employment and property income and expenses
• send quarterly updates to HMRC
• complete the year-end process through software, including the final tax position

The key dates HMRC has published for those joining from April 2026 include:

• 6 April 2026 – start keeping digital records under MTD
• 7 August 2026 – first quarterly update due
• 7 November 2026 – second quarterly update due
• 7 February 2027 – third quarterly update due
• 7 May 2027 – fourth quarterly update due
• 31 Jan 2028 – first MTD ITSA end-of-year tax return for the 2026/27 tax year due

Importantly, the 2025/26 tax year is still filed in the usual Self Assessment way by 31 January 2027, because that tax year ends before MTD begins. And MTD ITSA does not record other types of income such as savings interest, dividends, CGT, overseas, wages etc.

Why This Feels Much Bigger Than “Just Software”
A lot of articles online make MTD sound like a basic software upgrade.
It is not.

For many landlords and self-employed people, this will mean changing from a once-a-year tax mindset to an every-quarter compliance routine. That means more deadlines, more record keeping, more chances to get behind, and more pressure if the books are not tidy from the start. HMRC’s guidance makes clear that you must use compatible software, keep digital records and submit quarterly updates before you can complete the end-of-year process.

Why Cheap Software Alone Is Not the Answer
HMRC does not provide its own MTD software for Income Tax. Instead, taxpayers must choose from compatible third-party software. HMRC says there are free and paid options, but software being “compatible” does not mean it will choose the right treatment for you, keep you fully organised, or make the best tax decisions on your behalf.

This is where many people will get caught out.
Software can help you enter figures.
It does not replace judgement or tax knowledge and experience - which saves you tax.

It does not tell you:

• whether an expense is safe to claim
• whether something should be capital or revenue
• whether your rental records are complete
• whether your drawings, personal use, repairs or improvements are being treated correctly
• whether your quarterly data is sensible before it goes to HMRC

Cheap software may look attractive at the start, but if the bookkeeping is poor or the tax treatment is wrong, it can cost far more later in stress, overpaid tax, missed claims, corrections and HMRC problems.

Why Using Tax Affinity Is the Smarter Option
The best approach for most landlords and self-employed people is not to struggle through this alone and hope for the best.
It is to get the system set up properly from the start.

At Tax Affinity Accountants, we do not just tell clients to buy software and get on with it. We help make the whole process practical, compliant and manageable.

That means we can help you:

• work out whether MTD applies to you
• check the correct threshold based on your income
• set up the right process and software approach
• keep records properly from the beginning
• review the figures before they go to HMRC
• help make sure your tax position is calculated as accurately and tax-efficiently as possible based on your records and circumstances
• reduce the risk of mistakes, missed claims and bad habits becoming expensive problems later

For many people, that is the real value.
Not “having software”.
Having the right accountant behind the software.

A Simple Step-by-Step Plan

Step 1: Check if you are in scope
Look at your 2024/25 gross income from self-employment and property. If the combined figure is over £50,000, you should be preparing now for April 2026.

Step 2: Do not wait for panic season
If you leave this until the last minute, you are far more likely to choose the wrong process, keep poor records and end up stressed by the first quarterly deadline.

Step 3: Get your bookkeeping method sorted
You need a clean digital method that works in real life, not just in theory. HMRC says you need compatible software, but choosing software is only one part of getting ready.

Step 4: Let a specialist review your position
This is especially important if you have:

• both rental and self-employed income
• joint property income
• more than one property
• irregular income
• poor historic bookkeeping
• uncertainty over what to claim

Step 5: Let Tax Affinity handle it properly
The safest route is to let an experienced accountant set the system up, review the records and manage the compliance process with you.

What About Penalties?
HMRC has announced an easement for those who are mandated into MTD from April 2026: it will not apply penalty points for late quarterly updates for the first 12 months. But that does not mean quarterly updates can be ignored. HMRC still requires them, and they must be submitted before the year-end process can be completed. Penalties can still apply for late tax returns and late payment.

So the message is simple:
Do not confuse “temporary softening of penalties” with “this is not important.”

It is important.

Very.

Does This Apply To Limited Companies?
No. HMRC’s current MTD for Income Tax rollout from April 2026 is for sole traders and landlords in scope, not limited companies. Partnerships are expected to be brought in later, but they are not part of the April 2026 start.

Final Thought: This Is Not the Time to Wing It
This change is coming.
HMRC has confirmed that it is going ahead from 6 April 2026, and it has already said that hundreds of thousands of sole traders and landlords will be affected.
For some people, MTD will be manageable.
For others, it will become a cycle of missed deadlines, messy records and frustration.
The difference will often come down to one decision:

Do you try to patch it together yourself with cheap software, or do you get it set up and reviewed properly from the start?

At Tax Affinity Accountants, we help landlords and self-employed clients make this transition in a way that is clear, controlled and tax-efficient.

Speak to Tax Affinity Before April 2026
If you are a landlord or self-employed and think the new MTD rules may apply to you, now is the right time to act.

We can help you:

• confirm whether you are affected
• prepare your records
• put the right process in place
• avoid confusion and unnecessary stress
• make sure your figures are handled properly rather than left to cheap software or guesswork

Contact Tax Affinity Accountants today and let us help you get ready properly.

About the Author
Written by Anni Khan, Tax Affinity Accountants
Reviewed by Andrew Khan, Principal Accountant, Tax & Forensic Accounting Specialist, Recognised tax agent authorised to act on clients’ behalf with HMRC.

Tax Affinity Accountants are UK-based tax and accountancy specialists supporting individuals and SME businesses. With offices in Worcester Park, Kingston upon Thames, and Epsom & Ewell, they act for clients across the UK and internationally, providing compliant, HMRC-focused tax advice and support. For more information, visit www.taxaffinity.com or read more insights at www.taxaffinity.com/blog.

Important Notice
This article is for general information purposes only and does not constitute personalised tax advice. Tax treatment depends on individual circumstances. Professional advice should be sought before taking action.

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 🔔 Major MTD Changes Coming: Are You Ready for Digital Self-Assessment?

From April 2026, self-employed individuals and landlords earning over £50,000 will face a big shift in how they report their taxes. And just a year later, in April 2027, this will extend to those earning £30,000 or more. These new rules are part of HMRC’s Making Tax Digital (MTD) initiative — a digital-first transformation of the UK tax system.
So, what does this mean for you — and why is it so important to act now?

📌 What is Making Tax Digital (MTD) for Income Tax?
Making Tax Digital is HMRC’s ongoing initiative to modernise the UK tax system. Under this scheme, certain taxpayers will no longer be able to submit one annual Self Assessment return. Instead, they must:
✅ Keep digital records of all business and property income and expenses
✅ Use MTD-compatible software to submit updates every quarter
✅ File a final end-of-year declaration digitally
The goal? More accurate, timely reporting — but also greater burden for those unprepared.

🧠 Who Is Affected?The upcoming changes apply to:

• Self-employed business owners
• Landlords with rental income
• Individuals with combined self-employment and property income

If your total gross income from self-employment or property exceeds:

• £50,000 from April 2026
• £30,000 from April 2027

Then you must comply with MTD for Income Tax.
Still unsure if you fall into this category? -  Call Tax Affinity for a free eligibility check.

⏰ Why You Should Act Now
The transition to MTD won’t be a simple software upgrade. It requires a complete rethink of your record-keeping and ongoing reporting habits.
Without expert support, you risk:
❌ Missed deadlines
❌ Incorrect submissions
❌ Hefty HMRC penalties
Don’t let poor preparation cost you money — or your peace of mind.

💼 Why Choose Tax Affinity Accountants?
At Tax Affinity, we’re not just accountants — we’re digital tax transformation specialists. As the MTD deadline approaches, we offer:
🛠️ Full MTD Setup & Software Integration
📚 Real-time bookkeeping solutions
📅 Quarterly updates submission on your behalf
🧾 Expert tax advice tailored to landlords and sole traders
📞 Unlimited support with a dedicated personal accountant
With over 20 years' experience helping individuals and businesses stay compliant, we’re your trusted partner in the digital tax era.

💡 What Sets Us Apart?✔️ Transparent, fixed pricing
✔️ Tailored MTD packages — no “one size fits all”
✔️ Local, friendly, and jargon-free support
✔️ Recognised MTD-ready by HMRC
✔️ 5-star rated across Google, Trustpilot, and Facebook
Thousands already trust us — it’s time you did too.

📣 Take the Next Step — Before It’s Too Late
The longer you wait, the harder the transition becomes. But with Tax Affinity by your side, it’s easy, stress-free and fully HMRC-compliant.
👉 Book your free MTD readiness consultation today
📞 Call us or click here to fill our contact form on our website
🌐 Visit: www.taxaffinity.com

🛡️ The Bottom Line
MTD is not just another box to tick. It’s a major change in how you manage your finances. The good news? You don’t have to face it alone.

Tax Affinity Accountants are here to make it easy, affordable, and penalty-free. Don't settle for guesswork — partner with the experts.

👉 Switch to Tax Affinity today — before the rush hits. You'll be glad you did.

By Anni Khan at Tax Affinity Accountants

Tax Affinity Accountants are experts Business, Tax and Accountancy. With branches in Worcester Park and Kingston upon Thames and Epsom and Ewell they are considered in the Industry to be expert business accountants and tax advisors for both individuals and small & medium sized businesses (SME's). Helping and supporting both individuals and limited company owners / self employed people throughout the UK and the world, they regularly help clients grow their business providing tailored advice and support. Their support has been considered invaluable by many clients and key to their success.

For more information visit www.taxaffinity.com. To read more interesting articles like this visit www.taxaffinity.com/blog. Please feel free to comment and share this with your friends.

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