Making Tax Digital (MTD) for Landlords

nilocmac

If you receive qualifying income from self-employment and/or property, you’ll be legally required to use Making Tax Digital (MTD) for Income Tax – based on the level of qualifying income – from the following dates:
• April 2026, if your qualifying income is over £50,000 in the 2024 to 2025 tax year
• April 2027, if your qualifying income is over £30,000 in the 2025 to 2026 tax year
• April 2028, if your qualifying income is over £20,000 in the 2026 to 2027 tax year

So my question is hopefully simple. My wife and I rent out a property with Income of roughly £4000 each per year. Is this all the income we need to consider (we don't have to include our PAYE etc)? Is this really aimed at Landlords with multiple properties ?

flaneurs_lobster

Think you are right, the definition of "qualifying income" specifically excludes PAYE income.

What qualifying income is

Your qualifying income is the total income you get in a tax year from self-employment and property. Your total income may come from more than one source of self-employment or property income.

All other sources of income reported through Self Assessment do not count towards your qualifying income, such as income from:

• employment (PAYE)
• your share of profit from a partnership as an individual partner 
• dividends (including those from your own company)
• a State Pension
• private pensions

https://www.gov.uk/guidance/work-out-your-qualifying-income-for-making-tax-digital-for-income-tax

DRS1

Just be aware that they look at your GROSS rent so before you knock off any expenses.

artifin123

Only your property or self-employment income counts… you do not need to include PAYE salary, pensions, savings interest, etc. It's not just for landlords who own loads of properties, it mostly hits those with bigger rental collections or who make good money on their own.

TaxSortedUK

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TaxSortedUK

Not sure why this post didn't work last time…Anyway:

Worth adding a couple of extra points that often catch people out:

1. As DRS1 says, it's gross rent that counts - so if your rental income is £4,000 before expenses, that's the figure HMRC uses for the threshold, not your profit after mortgage interest, repairs etc.
2. The threshold is also combined - if you or your wife have any self-employment income as well, that gets added to the property income to work out if you cross £50,000. So a sole trader earning £47,000 with £4,000 rental income would be over the threshold even though neither source alone would be.
3. Joint property income is split between owners, so if you and your wife own equally, you'd each only count £2,000 - which keeps you well under the threshold regardless.

At £4,000 combined you're nowhere near needing to worry about MTD ITSA right now. The thresholds are £50,000 from April 2026, dropping to £30,000 from April 2027.

MPux

This is something a lot of landlords are still confused about. The key thing to understand is that MTD for Income Tax is mandatory from 6 April 2026 if your income from property is over £50,000. You'll need to keep digital records and submit quarterly updates to HMRC instead of one annual tax return. The fines for non-compliance start at £200 and increase the longer you leave it. Worth getting this sorted well before the deadline rather than leaving it to the last minute.

DRS1

And if you are under £50k don't think that is the end of it. From April 2027 the level goes down to £30k and I think it will also go down the next year to £20k (although that may still be up in the air).