Landlords urged to prepare for Making Tax Digital 2027

Landlords with gross income above £30,000 have six months to prepare for Making Tax Digital for income tax before it becomes compulsory for them on 6 April 2027.

HM Revenue and Customs (HMRC) is urging the next group to sign up early, with around 1,077,000 additional landlords and sole traders expected to join.

The threshold includes combined income from property and self-employment before deducting expenses or tax allowances.

Signing up now gives those affected time to check their details and choose compatible software before the requirements take effect, HMRC says.

Landlords already using MTD face a separate deadline, with their second quarterly update due on 7 November.

Preparing for digital tax

Craig Ogilvie, HMRC’s director of Making Tax Digital, said: “Hundreds of thousands of sole traders and landlords are already successfully using Making Tax Digital and now it’s time for the next group to get ready.

“Signing up now means you can prepare and familiarise yourself with the process before it becomes mandatory next April.”

Those joining will need to keep digital records and use compatible software to send quarterly summaries of their income and expenses.

The updates are not additional tax returns, although the software must also be used to complete the tax return.

Signing up for MTD

HMRC says recording information throughout the year can reduce the time spent gathering paperwork ahead of the January deadline.

Its estimate of the expanding number of landlords joining next April is based on analysis of Self Assessment returns for 2024 to 2025.

To sign up, customers must be registered for Self Assessment and have submitted a tax return within the past two years.

Agents can enrol clients through GOV.UK, which also lists compatible software.

Exemptions are available, including for those who are ‘digitally excluded’.

The next expansion follows the introduction of MTD for those with income above £50,000 in April 2026, with the threshold due to fall further to £20,000 from April 2028.

Landlords may find this HMRC video helpful