Making Tax Digital for landlords
From 6 April 2027, landlords with more than £30,000 of gross rent (their share) must keep digital records and send quarterly updates. Here's what that means in practice.
Are you in?
MTD applies if your gross property income plus any self-employment income was over £30,000 in 2025/26. It's turnover, not profit, so a landlord with £32,000 of rent and £20,000 of costs is still in. Check with the free MTD checker.
Joint ownership and Form 17
Only your share counts, both for the threshold and in your records. GOV.UK lets joint owners keep simpler records, one per category for each update period, and you can add jointly-let expenses at the year end instead of in every quarterly update.
Watch out: married couples and civil partners are taxed 50/50 by default, unless they've sent HMRC a Form 17. The NRLA's landlord guidance makes the same point: the 50/50 split applies unless a Form 17 declaration has been made.
Mortgage interest
For residential lets, mortgage interest ("residential finance costs") isn't deducted from your rental profit. You get a tax credit instead, at 20% in 2026/27 and 22% from 2027/28. That's why it must be recorded separately, even if you use the simpler records allowed under £90,000. Only the interest counts, not capital repayments.
Letting agents
If an agent collects the rent and deducts fees, record the gross rent as income and the fees as an expense, not just the net amount paid to you. Ask your agent for statements in a format you can import.
The April 2027 property tax rise
From 6 April 2027, property income gets its own tax rates in England and Northern Ireland: 22% basic, 42% higher, and 47% additional, two points above the normal rates. Scotland and Wales are expected to set their own. The NRLA estimates the change could add £20 to £25 a month to typical rents.
Tools that help landlords
- The MTD Record Keeper handles up to 10 properties, applies your ownership share automatically, keeps mortgage interest separate, and shows profit for each property.
- The Plain-English Guide has a full chapter on landlord pitfalls and a countdown plan to April 2027.
Landlord questions
Does joint property count towards the MTD threshold?
Only your share counts. If you own a property 50/50 that brings in £40,000 a year, £20,000 counts towards your threshold.
How do married couples split rental income?
Married couples and civil partners are taxed 50/50 by default, whatever the actual ownership split, unless they've sent HMRC a Form 17 declaration of beneficial interests.
Is mortgage interest an expense under MTD?
For residential lets, mortgage interest isn't deducted from profit. You get a tax credit instead: 20% in 2026/27, rising to 22% from 2027/28. Record it separately from other costs.
Are limited company landlords affected?
No. Property owned through a limited company pays Corporation Tax and is outside MTD for Income Tax.
Sources: GOV.UK MTD for Income Tax guidance; NRLA, "Making Tax Digital for Landlords". General information, not tax advice.