Who has to join

• From 6 April 2026: qualifying income over £50,000 (based on your 2024/25 return).
• From 6 April 2027: qualifying income over £30,000 (based on your 2025/26 return).
• From 6 April 2028: qualifying income over £20,000 (based on your 2026/27 return).

Qualifying income is your gross income from self-employment and property added together, before expenses. A landlord with £22,000 of rent and a sole trader business turning over £15,000 has £37,000 of qualifying income, even if profits are much lower.

What you will need to do

• Keep records of income and expenses digitally, in MTD-compatible software.
• Send a quarterly update by 7 August, 7 November, 7 February and 7 May.
• Submit a final declaration by 31 January after the end of the tax year.

Quarterly updates are summaries, not mini tax returns. They do not change what you pay, but late updates can build up penalty points.

Getting ready without the stress

• Check your qualifying income for the relevant year now.
• Open a separate bank account for the business or lettings if you haven’t already.
• Choose software that links to your bank feed so most transactions record themselves.
• Start photographing receipts as you get them, rather than in a batch at year end.

How we help

We set up the software, connect your bank, agree a simple monthly routine and file the quarterly updates for you. You keep running your business; we keep HMRC informed.

This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.

The minimum periods

• Sole traders and partnerships: at least five years after the 31 January submission deadline for the tax year.
• Limited companies: at least six years from the end of the financial year the records relate to.
• VAT-registered businesses: VAT records for at least six years.
• Employers: payroll records for at least three years after the end of the tax year.

Keep them longer if a return is late, under enquiry, or if an asset you own will be sold in future.

What counts as a record

• Sales invoices, receipts and till records.
• Purchase invoices and receipts for expenses.
• Bank statements for every business account.
• Loan agreements, leases and hire-purchase paperwork.
• Payroll, pension and dividend paperwork for companies.
• Mileage logs if you claim vehicle costs.

Paper or digital?

Digital records are fine, as long as they are clear, complete and readable. For Making Tax Digital, many businesses must keep records in compatible software anyway. A clear photo of a receipt, stored against the transaction in your bookkeeping app, is enough.

A simple routine

• Use one business bank account and connect it to your software.
• Match receipts to transactions weekly, not annually.
• Back up your files, and keep a list of where older years are stored.

How we help

We set up cloud bookkeeping with bank feeds and receipt capture, and review your records each month so year-end accounts become a formality.

This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.

Making Tax Digital applies to rental income

MTD for Income Tax covers landlords as well as sole traders. It started on 6 April 2026 for people with qualifying income over £50,000 and extends to over £30,000 from April 2027 and over £20,000 from April 2028. Qualifying income is gross rent plus any self-employment income — before expenses. If you own property jointly, you count your share.

Once you’re in, you keep digital records, send quarterly updates and file a final declaration after the year end.

New property income tax rates from April 2027

From April 2027, property income will be taxed at its own rates: 22% basic, 42% higher and 47% additional — two percentage points above the standard Income Tax rates. For many landlords, that means a higher bill on the same rent.

Steps worth taking now

• Check your qualifying income and whether you are already inside MTD.
• Separate rental money from personal money with a dedicated bank account.
• Review how property is owned. Ownership between spouses, or through a company, changes who pays tax and at what rate — but moving property can trigger Capital Gains Tax and Stamp Duty Land Tax, so get advice first.
• Keep a full record of finance costs, repairs and letting fees; none of it helps if you can’t prove it.
• If your rental income is small, the £1,000 property allowance may be simpler than claiming expenses.

How we help

We look after landlords’ records, quarterly updates and returns, and model the effect of the 2027 rate changes on your portfolio so you can plan rather than react.

This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.