Webinar replay: Making Tax Digital – a practical guide for entrepreneurs and property owners

April 2026 marks the start of HMRC’s phased introduction of Making Tax Digital for Income Tax (MTD IT). These changes will affect landlords, sole traders and many property owners – bringing new requirements for record‑keeping, submissions and digital compliance.

In this webinar, our tax and business specialists explain what MTD IT means in practice and how you can prepare with confidence. We’ll also be joined by estate and letting agents Dutch & Dutch, who will share insights from the perspective of managing agents and their landlord clients.

Panel Guests:

Webinar host:

Jason Appel, Partner, Accounts and Business Services

Jason’s career at BKL spans from trainee to senior leader. He has reshaped and expanded our business services teams and supports clients—particularly in the property sector—as they grow and adapt to regulatory change.

Danielle Dark, Director, Private Client Tax

Danielle advises non‑UK residents, landlords and business owners on a wide range of private client matters. She helps individuals and families navigate regulatory changes that affect their tax position and is one of BKL’s leading experts on Making Tax Digital for Income Tax.

Tim Gazzard, Partner, Accounts and Business Services

Tim combines strong technical expertise with a personal approach. With two decades of experience supporting businesses and individuals, he now focuses on the music, media, sport and entertainment sectors while continuing to advise clients across a range of industries.

David Matthews, Director, Dutch & Dutch

David leads Dutch & Dutch, a 125‑year‑old estate agency and property management company in West Hampstead. His team manages around 600 residential and commercial properties for 240 landlord clients, giving him a practical perspective on how MTD IT will affect property owners.

Webinar replay

Being ready: what changes for landlords and sole traders day to day, how they should prepare, and how tax advisers and managing agents can help

Record-keeping and submissions: what good records should look like under MTD IT, what you need to submit each quarter, and the risk of not keeping your records up-to-date

Pitfalls and solutions: the practices you should change now, how not to underestimate the impact, and practical steps to help you get ahead

Your questions answered: including software options, penalties, non-resident landlords and jointly owned properties

Key points: Making Tax Digital for Income Tax

Background

MTD IT has been introduced to provide both taxpayers and HMRC with prompter and more accurate information for forecasting tax liabilities and revenues

MTD IT is not a drastic change but an administrative shift. Benefits include earlier awareness of tax liabilities and improved business decision-making throughout the year

MTD currently applies only to individuals with qualifying income, such as UK and overseas rental income, self-employment income, and certain trust incomes, with partnerships and companies excluded for now

The phased introduction of MTD is based on income thresholds: over £50,000 from April 2026, over £30,000 from April 2027, and over £20,000 from April 2028, with annualised income considered for those starting mid-year

Exemptions include the lack of a National Insurance number, certain residence and domicile statuses, and income from trusts and estates. Some exemptions are automatic while others need to be applied for

Practical Implications for Landlords under MTD

Landlords must now maintain digital records of all income and expenses throughout the year, moving away from annual paper-based reporting to real-time digital categorisation of transactions

An estimated 260,000 landlords will be affected initially, expanding to around 3 million by 2028 as income thresholds are lowered. Single-property landlords are likely to be included soon

Managing agents can significantly reduce landlords’ workload by maintaining live digital records, categorising transactions, and exporting data compatible with MTD software

Frequent misunderstandings include the distinction between joint ownership and partnerships, the non-deductibility of mortgage capital, the difference between revenue and capital expenses, and the rules for replacement of domestic assets

UK and overseas rental incomes are reported separately in quarterly filings, but multiple properties within each category are aggregated into a single submission

MTD reporting requirements and record-keeping

Taxpayers must submit quarterly returns for the previous complete quarter, by set deadlines:

By 7 August for April-June

By 7 November for July-September

By 7 February for October-December

By 7 May for January-March

These quarterly returns are in addition to the usual annual self-assessment, with tax payment dates unchanged

Digital records must include each transaction’s amount, date and type. Evidence such as receipts and invoices should be retained for at least five years, ideally within MTD-compatible software

Quarterly submissions only require total income and expenses per category. However, as the system remains self-assessment based, underlying data must be available for HMRC enquiries

Cash payments can be recorded in the software via a designated cash account, and that using cards or digital methods may simplify record keeping

MTD-compatible software and automation

When choosing suitable MTD IT software, consider automation, support and compatibility with your needs, including bank and credit card feeds

Many software solutions offer automated data import from bank and credit card accounts, categorisation rules, and digital capture of receipts. Even so, it’s important to review all data

Some software integrates with property management systems to aggregate and categorise landlord data. This enables both landlords and their advisers to review and submit MTD IT returns. It can also track income and expenses per property, allowing landlords to view individual property P&Ls

While spreadsheets can still be used for simple cases, they must be linked to HMRC via bridging software. However, this means less automation and more manual effort compared to dedicated MTD software

Practical questions and common scenarios

MTD IT thresholds apply per individual, so jointly owned property income is split, and only individuals with qualifying income above the threshold are required to comply

Landlords must report gross rental income, with agent commissions recorded as expenses. Software can automate this split

Tax-related adjustments such as accruals, prepayments and certain allowances are made in the end-of-year declaration, not in quarterly MTD IT submissions

Business expenses can be paid with personal credit cards, but this may complicate record-keeping. You would need to carefully separate business and personal transactions

MTD IT penalty regime and compliance deadlines

Late submissions accrue penalty points, with a £200 penalty after four points

For the 2026/27 tax year, points apply only to the end-of-year declaration

Points expire after two years if you maintain compliance

Late tax payments incur a 3% penalty after 15 days, another 3% after 30 days, and a 10% annualised penalty thereafter. This reflects HMRC’s expectation that taxpayers can plan ahead with earlier knowledge of liabilities

While MTD compliance is based on the previous tax year’s income, changes in circumstances can affect ongoing MTD obligations, e.g. selling a property

Our specialists’ top recommendations

Regular, up-to-date record-keeping is essential, reducing stress and enabling better financial planning

Speak to accountants and/or managing agents early to select appropriate MTD-compatible software and integrate processes, especially if you’re a landlord managing multiple properties

If you are or will be within the scope of MTD IT, select suitable software with guidance from professionals

Contact Jason

Your panel

Danielle Dark

Director, Private Client Tax

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Danielle’s profile

Tim Gazzard

Partner, Accounts and Business Services

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Tim’s profile

David Matthews

Managing Director, Dutch & Dutch

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David’s profile