Making Tax Digital is coming

Originally published by The Intermediary

Making Tax Digital is coming – how advisers can help landlords

Making Tax Digital (MTD) for Income Tax is no longer a future change that landlords can safely park for another year. From the 6^th April 2026, it becomes mandatory for a large number of unincorporated landlords and sole traders, and advisers should already be thinking about how this impacts their landlord clients, as well as potentially their own businesses.

Much of the current attention is on the Renters’ Rights Act and the tenancy reforms due to kick in from May. However, for many landlords there is a firm and earlier deadline that matters just as much. Any individual landlord or sole trader with qualifying income above £50,000 will need to comply with MTC for Income Tax from April 2026, and HMRC will not enrol people automatically. That places real importance on awareness and preparation.

For advisers, this is not simply a technical tax change to note and move on from. It is another area where landlords will need support, reassurance and clear explanations, and where advisers can add value by helping clients understand what is changing and what practical steps they need to take.

What MTD for Income Tax involves

MTD for Income Tax is a new way for individuals to report income and expenses to HMRC. It applies to sole traders and landlords who complete self-assessment and whose total income from self-employment and property exceeds £50,000 a year. This includes landlords who hold property in their own name, but it does not include limited companies at this stage.

From April 2026, those within scope will need to keep digital records using recognised software rather than paper records or basic spreadsheets. They will also need to send quarterly updates to HMRC through that software. These updates are not tax returns and they do not trigger tax payments. They are simply summaries showing income and expenses for each three-month period.

The annual tax return will still be required, and any tax due will still be payable by 31^st January following the end of the tax year. One common misunderstanding is that MTD means paying tax quarterly, but that is not the case.

It is also important to note HMRC will not move people onto the system automatically. Landlords and sole traders must sign up themselves, or through an agent, which means those who are unaware of the rules could easily miss the deadline.

Which landlord clients advisers should be thinking about

Many landlords will assume that MTD does not apply to them, particularly those who do not see themselves as running a business. In reality, many advisers will have clients who are likely to fall within scope without realising it.

This includes landlords with several properties, those with a mix of rental income and self-employed income, and those close to the £50,000 threshold who may cross it as rents increase. It may also affect joint borrowers where one party has qualifying income in their own name.

Mortgage advisers themselves may also be impacted if they operate as sole traders, as perhaps will other self-employed clients advisers work with. That makes it even more important for advisers to understand the rules clearly.

What needs to happen before April 2026

HMRC sets out a clear process for those who need to use MTD. The first step is working out qualifying income, as this determines whether the rules apply. HMRC guidance explains what income is included and how it should be calculated.

The next step is confirming when an individual needs to start using the service. HMRC provides an online tool to help with this. After that, suitable software must be chosen, as HMRC does not provide its own system. There are a wide range of options available, and the right choice will depend on how complex someone’s income is and how confident they are with digital tools.

Once prepared, individuals need to sign up to MTD and then use the system throughout the year. This includes keeping records up to date, submitting quarterly updates, and completing the annual return through the same software.

How advisers can support landlord clients

Advisers are not expected to give tax advice unless they are qualified to do so, but they are well placed to help landlord clients understand what is changing and why it matters. Simply raising MTD during a review or remortgage discussion could prompt action far earlier than landlords might otherwise take.

Advisers can also add value by signposting clients towards appropriate solutions, whether that is accounting support, digital record-keeping tools or bank accounts designed to help separate personal and property income and link with accounting software.

Increasingly, financial providers are building systems, utilising bank accounts with MTD-related ‘widgets’ that make tracking income and expenses simpler and more accurate, which can reduce admin and errors over time.

For advisers, this fits naturally within the wider set of added services that landlord clients now expect. Helping clients prepare for MTD supports better organisation, clearer affordability discussions and stronger long-term relationships. In some cases, there may also be opportunities to introduce clients to third-party services where appropriate.

Why acting now makes sense

Landlords are already dealing with regulatory change, cost pressures and shifting market conditions, and MTD adds another layer to manage. Advisers who understand the rules now, and who start these conversations, will be better placed to support clients through the change and demonstrate value beyond the mortgage itself.

In a market where strong adviser relationships matter more than ever, that proactive support can make a real difference.