For landlords across Torquay, Paignton, Brixham, Newton Abbot, Dawlish and the wider Torbay and Teignbridge area, Making Tax Digital for Income Tax is no longer a distant change on the horizon.
The first phase began on 6 April 2026, and qualifying landlords now need to keep digital records and submit regular updates to HM Revenue & Customs. Further phases will bring more property investors into the system over the next two years.
If you own one rental property or a growing portfolio, preparing early can make the transition considerably easier. It also gives you a clearer view of rental income, expenses and the ongoing performance of each property.
Important: This article is general guidance, not tax or accounting advice. If you are unsure whether Making Tax Digital applies to you, speak to your accountant or HMRC.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax, often shortened to MTD ITSA, is HMRC’s new way of collecting income and expense information from individuals with qualifying self-employment and property income.
It is intended to replace the traditional process of keeping paper records throughout the year and submitting one annual Self Assessment return with a more regular digital reporting process.
Landlords within the rules will need to:
- Keep appropriate property income and expense records digitally.
- Use software that is compatible with Making Tax Digital.
- Send four quarterly updates to HMRC each tax year.
- Submit a Final Declaration after the end of the tax year.
- Continue paying any tax due by the relevant deadlines.
The change is particularly important for landlords who manage several properties, receive rent from different sources or also have income from self-employment.
When will MTD apply to landlords?
The rollout is being introduced in stages, based on qualifying income. This means gross income before allowable expenses, rather than the final profit after mortgage interest, repairs, insurance and other costs have been deducted.
Your property income is combined with any income from self-employment when assessing the threshold.
| MTD start date | Qualifying income measured in | Threshold |
|---|---|---|
| 6 April 2026 | 2024–25 tax year | More than £50,000 |
| 6 April 2027 | 2025–26 tax year | More than £30,000 |
| 6 April 2028 | 2026–27 tax year | More than £20,000 |
For example, an individual landlord with £55,000 of gross rental income in the 2024–25 tax year should have started using MTD for Income Tax from 6 April 2026.
A landlord with £35,000 of combined gross property and sole-trader income in 2025–26 is likely to fall into the next phase, beginning on 6 April 2027.
The relevant figure is not simply the rent from one property. It may include income from:
- Several personally owned rental properties.
- A holiday let or other qualifying property business.
- A sole-trader business.
- Other qualifying self-employment activities.
Landlords who own property through a limited company are generally dealt with under different rules, rather than MTD for Income Tax. Joint ownership and partnership arrangements can also affect the calculation, so professional advice is sensible if your circumstances are not straightforward.
You can check your position using the official HMRC MTD eligibility tool.
Digital record-keeping: what needs to change?
The biggest practical change for many landlords will be moving away from a mixture of paper invoices, email receipts, bank statements and spreadsheets that are only reviewed once a year.
Digital records should be kept in a way that supports the figures submitted to HMRC. Typical records include:
- Rent received and the date it was received.
- Letting or management fees.
- Repairs and maintenance costs.
- Buildings and contents insurance.
- Accountancy and professional fees.
- Utilities paid by the landlord.
- Legal and advertising expenses.
- Travel or other costs where they are allowable.
- Mortgage interest information, where relevant to the tax calculation.
- Records of deposits, refunds and adjustments.
The purpose is not simply to save documents electronically. The underlying income and expenses need to be recorded digitally in a suitable format, using MTD-compatible software or an approved digital connection.
A spreadsheet on its own may not meet every requirement. Some landlords use accounting software, while others use a spreadsheet connected to compatible bridging software. Your accountant can help you select an approach that fits the size and complexity of your portfolio.
How do the quarterly updates work?
Landlords who fall within MTD must submit four quarterly updates for each tax year. These updates provide HMRC with income and expense information during the year.
For the 2026–27 tax year, the standard deadlines are:
- 7 August 2026 : covering the first quarter.
- 7 November 2026 : covering the second quarter.
- 7 February 2027 : covering the third quarter.
- 7 May 2027 : covering the fourth quarter.
The first deadline has now passed for landlords already within the 2026–27 phase. If you were required to join from April 2026 but have not yet signed up, speak to your accountant or HMRC promptly.
Quarterly updates are not the same as four tax bills. They are reports of income and expenses, allowing HMRC to build a picture of your position throughout the year. The figures can be corrected where necessary, and your final position is confirmed later.
You will also need to submit a Final Declaration after the tax year. This replaces the traditional annual Self Assessment tax return for the relevant income and confirms your final taxable position, reliefs and allowances. For the 2026–27 tax year, the Final Declaration deadline is generally 31 January 2028.
The 2025–26 tax year remains under the existing Self Assessment process, meaning qualifying landlords will still need to meet the normal deadline for that return.
Why preparation matters for local landlords
For a landlord with one straightforward property, the change may appear manageable. However, the administration becomes more involved when you have:
- Several properties in different locations.
- Tenancies starting and ending at different times.
- Voids between tenants.
- Jointly owned properties.
- Multiple bank accounts.
- Regular repair and improvement work.
- Rent paid through a managing agent.
- Separate personal and property-related spending.
- A combination of rental and self-employment income.
A well-organised digital process can reduce the risk of missing income, losing receipts or confusing repairs with capital improvements.
It can also give you a more useful view of your portfolio. Instead of waiting until the end of the tax year, you can see how each property is performing, where maintenance costs are increasing and whether rental income is keeping pace with outgoings.
This is particularly valuable in the local market, where a Victorian terrace in Torquay, a seaside apartment in Paignton, a family home in Newton Abbot or a property in Brixham may each have different maintenance, insurance and letting considerations.
How a managing agent can help
A letting and property management service does not replace your accountant, and landlords remain responsible for their tax affairs. However, accurate property records and timely statements can make the accounting process much easier.
At Butterworth Sales, Lettings and Management, we support landlords across Torbay and Teignbridge with the practical day-to-day running of rental homes. That includes keeping clear records of rent, agreed charges and property-related activity, alongside professional handling of maintenance matters.
We have invested in maintenance reporting software so that repair issues can be logged, tracked and documented more efficiently. This creates a clearer audit trail for landlords and helps ensure that important property information is not lost in scattered messages or paperwork.
Our aim is simple: to treat every client property as if it were our own. That means paying attention to presentation, responding properly when issues arise and helping landlords stay informed about what is happening at their property.
You can find out more about our letting services or review our landlord fees, where we set out our charges clearly. Our approach is based on transparent pricing and a no hidden costs policy, so landlords can understand what they are paying for from the outset.
A practical preparation checklist
If MTD applies to you now, or is likely to apply shortly, consider taking these steps:
- Calculate your qualifying income for the relevant tax year, using gross property and self-employment income.
- Speak to your accountant about your reporting obligations and the software they recommend.
- Separate property finances from personal spending wherever possible.
- Create a digital record for every rental property rather than combining everything into one unclear figure.
- Keep invoices and receipts in a consistent digital filing system.
- Reconcile rental statements and bank payments regularly.
- Check that your agent can provide clear income and expense information.
- Put the quarterly deadlines in your calendar.
- Allow time for corrections, rather than preparing everything immediately before a deadline.
- Review your reporting process each quarter to identify missing information early.
MTD is a reporting change, but it is also an opportunity to improve the way your property business is organised. Good records can support better decisions about rent reviews, maintenance budgets, refinancing and future investment.
For local landlords who would like to discuss professional letting or property management, contact Butterworth Sales, Lettings and Management. We cover Torquay, Paignton, Brixham, Newton Abbot, Dawlish and surrounding areas, with straightforward advice and transparent fees.