Landlords earning more than £50,000 a year have exactly one year to prepare for a major shift in tax reporting rules – or risk steep fines – as the government’s Making Tax Digital (MTD) regime takes effect in April 2026.
From that date, landlords will be required to submit quarterly digital updates to HMRC, replacing the current annual self-assessment process. The first deadline – covering income and expenses from 6 April to 5 July 2026 – will fall on 7 August 2026.
A survey by Accountex found four in five accountants view MTD as the biggest challenge in the coming year. One in three admitted they feel unprepared, with 10% saying they are “very unprepared.”
Tax expert Robert Jones said missing the new deadlines could trigger escalating penalties:
• £100 fine immediately for a late return
• Daily charges of £10 after three months, up to £900
• After six months, an additional £300 or 5% of the tax owed – whichever is higher
• The same penalty again at 12 months
• Even higher fines for deliberate non-compliance
Jones warned that paying late also carries separate penalties – 5% of the unpaid tax after one month, another 5% after six months, and a further 5% after 12 months – plus interest from the due date.
He said the traditional “last-minute rush” to file annual tax returns will no longer be possible: “Regular digital reporting with the correct software will be mandatory. If you earn from both property and self-employment, you’ll need to keep separate records and submit two sets of quarterly reports.”
Jones urged landlords to use the next year as a trial run to avoid costly mistakes: “Shifting from annual admin to real-time updates is a step up in organisation, but not an impossible one. Logging income and expenses as you go could save you hundreds of pounds in fines once the rules take effect.”
Landlords earning between £30,000 and £50,000 will join the scheme in 2027, but Jones advised all those affected to start preparing now “while there’s still room to learn without financial pressure.”
