Making Tax Digital for Income Tax (MTD for IT) is a UK government initiative introduced by HM Revenue & Customs (HMRC) to modernise the tax system.
Under MTD for IT, landlords must keep digital records and submit updates to HMRC throughout the tax year instead of filing everything in one annual Self Assessment return.
Who It Applies To
MTD for IT applies to landlords who:
Earn rental income above the HMRC threshold
Are registered for Self Assessment
Are required to comply with MTD based on HMRC rollout timelines
What Landlords Must Do Each Year
Under MTD for IT, landlords have three main obligations:
1️⃣ Keep Digital Records
You must maintain digital records of:
Rental income
Allowable expenses
Property details
Adjustments (if applicable)
Records must be stored in MTD-compatible software.
You can no longer rely solely on spreadsheets unless they are digitally linked and compliant.
2️⃣ Submit Quarterly Updates
Each tax year is divided into four quarterly reporting periods.
For each quarter, you must:
Summarise your income and expenses
Submit a quarterly update to HMRC
Meet the quarterly submission deadline
3️⃣ Submit an End of Period Statement (EOPS)
At the end of the tax year, you must:
Finalise your property income
Make accounting adjustments (e.g. accruals, private use, capital allowances)
Confirm your final taxable profit or loss
This replaces the property section of the traditional Self Assessment return.