Who Let The Dogs Out? Oh yes, we did, by inviting this 'government' to rule our country. Oops. So here's what these wonderful people are up to now...
The rollout of MTD for Income Tax (sometimes called “MTD ITSA”) is being phased in. They delayed it for a while, but now it's coming into force. REMEMBER: this only applies to private landlords, not limited companies.
From 6 April 2026, the rules apply to unincorporated businesses and landlords with business or property income over £50,000.
From 6 April 2027, the threshold lowers to £30,000.
Further reductions (e.g. to £20,000) have been signalled for future years.
If you’re below the threshold, MTD is not mandatory — but you can choose to sign up voluntarily. (Oh yes, I really want to, don't I?!)
AND HERE'S WHAT YOU MUST DO:
Record-keeping & filing requirements. Send everything off to the government every three months - this includes your expenses and rental income for that quarter.
Digital record-keeping
Use software that is compatible with MTD. That means either: a single software product that handles record-keeping and submissions, or a combination of record-keeping + “bridging software” linked together.
If using bridging software (e.g. connecting a spreadsheet to a bridging tool), you must ensure the records are digitally linked — you may not manually copy/paste from one to another before submitting.
The things you need to record digitally (for self-employment or property income) include: amount, date, and category of the income or expense.
You still need to keep original records or supporting documents (e.g. receipts, invoices) — either as originals or copies. Digital records don’t replace that obligation entirely.
If you have multiple income sources or businesses
Separate digital records are needed for each business/income source. If you have more than one self-employment trade, or self-employment + rental income, each should be recorded separately.
If you have both UK property and foreign property, treat them as separate 'property businesses'.
Filing: Reporting & deadlines
For VAT-registered businesses:
VAT returns must be submitted using MTD-compatible software by the usual VAT-return deadlines (e.g. quarterly). British Business Bank
For self-employed / landlords under MTD for Income Tax:
Quarterly updates are required during the tax year — not just one annual Self Assessment.
At the end of the tax year you also submit a final declaration to confirm or adjust your total income/expenses.
Special rules & details
For landlords who jointly let properties: there are provisions to simplify record-keeping (you may choose fewer details for joint property income/expenses) — but you must still follow whichever approach you choose consistently.
Some expense types — e.g. 'disallowable expenses' (personal / non-business use) — may still require separate tracking when you want to claim business-related portion. GOV.UK
If you change your accounting software (or your agent changes software), you must still preserve and retain access to historical digital records — because HMRC may require them.
You must keep digital records for at least 5 years after the 31 January submission deadline for each tax year.
What happens if you don’t comply (VAT side in particular)
As a VAT-registered business, failure to use MTD-compliant software and keep digital records means you’re not compliant with your VAT obligations.
For late VAT returns under MTD, there’s a penalty system — missing deadlines can lead to penalty points and eventual fixed penalties. British Business Bank.
Thanks once again, Keir and Rachel. You will definitely get our next vote because you encourage business, doing wonders for the economy. You and your government are veritable masterminds, perpetually evolving to help property investors and businesspeople alike, creating jobs and wealth with incredible, revolutionary ideas and practices.
Not.
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