Making Tax Digital: Major changes ahead for landlords and the self-employed
10 March 2026 • Battersea, Chelsea, Chiswick, Fulham, Hammersmith, HMRC, Kensington, Knightsbridge, Mayfair, Putney, Wandsworth, Warrener Stewart, Warrener Stewart Edinburgh, Warrener Stewart London, Wimbledon
From April 2026, landlords and self-employed individuals with annual business or property income above £50,000 will be required to adopt the government’s Making Tax Digital (MTD) scheme.
For those affected, the changes are significant, with more frequent reporting to HMRC and the need to invest in compatible software. To help you prepare, we’ve summarised the key updates and what you need to know.
Warrener Stewart recognises the scale of this change and is here to guide you through it.
Who and what is affected?
MTD will be introduced in phases, based on income:
• From 6 April 2026: landlords and self-employed individuals with gross income over £50,000
• From 6 April 2027: threshold reduces to £30,000
• From 6 April 2028: threshold reduces to £20,000
HMRC determines qualifying income using the previous tax year’s submissions, including all relevant sources. Exemptions and deferrals are also available.
If you are unsure whether you qualify or want clarity on exemptions, guidance is available to ensure you are correctly prepared.
New Reporting Requirements
The biggest change under MTD is how and when you report income and expenditure. Instead of submitting a single annual Self-Assessment tax return, you will need to:
• Maintain digital records of all business and rental income and expenses
• Submit updates to HMRC quarterly via approved MTD software (or bridging software linking spreadsheets)
• Submit a final declaration at year-end to confirm totals and claim allowances
We can help you plan these submissions so the process is smooth and compliant, reducing the risk of errors or missed deadlines.
Accounting Software
Central to MTD is the requirement to maintain digital accounting records. You must use HMRC-approved MTD-compatible software. Bridging software linking spreadsheets is also permitted, though free solutions are unlikely.
Support is available to ensure your chosen system works seamlessly with HMRC’s requirements.
Payment of Tax
Currently, self-assessment payments are made in two instalments: 31 January and 31 July. These schedules remain in place, though quarterly payments may be introduced once MTD is fully operational.
Clear guidance can help you plan and manage your payments without stress.
Compliance and Penalties
With the introduction of MTD comes a new compliance framework with a points-based penalty system:
• Missed quarterly deadlines result in penalty points
• Accumulating points can trigger fines (e.g., £200 for four points)
• Penalties and interest for late payments are expected to increase
HMRC is expected to take a lenient approach during the first year of each phase, though final annual deadlines remain firm.
We can help you understand these rules and adopt practices to minimise the risk of penalties, giving you confidence in meeting your obligations.
Conclusion
MTD represents a major shift for landlords and the self-employed, with increased reporting and the potential for errors or penalties. While initial concerns are understandable, most taxpayers should find the transition manageable with the right support.
If you have questions or need guidance on MTD, Warrener Stewart is here to help. Contact your usual representative, call 020 7731 6163, or email info@warrenerstewart.com to speak with a member of our team.
