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Quarterly Reporting: The new habit you won't want to kick

For years, the rush to meet the 31st January (online) self-assessment deadline has been a staple of the private landlord’s calendar. However, from 6 April 2026, the process of tax reporting is changing for many.  

Thanks to the Government’s Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA) initiative, many private residential landlords will move from submitting a single annual tax return to a system of quarterly digital updates. 

To recap, if your qualifying gross income from property and self-employment exceeded £50,000 in the 2024/25 tax year, you will be in the first wave of mandation for MTD, with the threshold dropping to £30,000 in April 2027 and £20,000 the year after.  

While the transition might sound daunting, and let’s face it no-one likes being forced to change how they work, getting your systems in place now might actually make managing your finances more streamlined and efficient in the long run.

Quarterly reporting

As most will be aware by now, under MTD, the days of handing over a shoebox of receipts to your accountant once a year are numbered. Instead, landlords will be required to keep digital records and submit summary updates to HMRC every three months, followed by a final declaration. 

The quarterly deadlines are set for the 7th of August, November, February, and May. To manage this change it is a good idea to get ahead of the deadlines by introducing some new habits and letting technology take the strain wherever possible.  

  • Adopt MTD-compatible software: You must use software officially recognised by HMRC to bridge your records directly to their systems. Spreadsheets can still be used, but only if linked via bridging software. The NRLA has partnered with Tax’d, meaning that members can take care of MTD compliance without leaving their Portfolio account. 

  • Automate your bank feeds: Link a dedicated property bank account directly to your accounting software, or NRLA Portfolio account. This pulls transactions in automatically, meaning you only have to click to categorise them as "rent" or "repairs" rather than manually typing out data. 

  • Digitise at the source: Use receipt-scanning smartphone apps to snap pictures of maintenance invoices or service charges the moment you receive them, saving them directly to the cloud or (you’ve guessed it) in Portfolio.  

These three steps represent the lion’s share of the changes most landlords will have to make to their record keeping, making MTD compliance a bit of a pain but relatively hassle-free.

What about finance costs? Section 24 meets MTD

One of the questions I hear most often from landlords preparing for MTD is how to handle mortgage interest, which is hardly surprising given how poorly it is handled by the current self-assessment process.  

Since the introduction of section 24, residential mortgage interest is no longer treated as a standard allowable expense that reduces your taxable rental profit. Instead, it is applied as a tax reduction equivalent to the Basic Rate of Income Tax (currently 20%).

Because of this distinct tax treatment, the MTD system has very specific rules for how these finance costs are reported. 

Here is what you need to know to stay compliant: 

  • Remember, it must be recorded separately: To ease the burden of MTD, HMRC allows landlords with income below the VAT threshold to use "consolidated expenses"—meaning you can submit just one total figure for all income and one for all expenses. However, residential property finance costs are the strict exception. Your mortgage interest must always be categorised and recorded as a separate, distinct line item in your digital records and quarterly updates. 

  • Tag it correctly from day one: When setting up your software’s ledger ensure you have a specific, dedicated category for property finance costs. Do not categorise your mortgage payments with general property expenses, bank charges, or letting agent fees. 

  • Capital vs. Interest: Remember that only the interest portion of your mortgage payment qualifies for the tax reduction. If you have a repayment mortgage, you will need to ensure your digital records accurately separate the interest charged from any capital repayment.

Above all, preparation is key

We have said it before, but efficiency under MTD comes down to forming habits. Lots of landlords, like me, put off dealing with their finances until the last minute and in doing so create a much bigger job. 

By spending a few minutes every week, or month reconciling your automated bank feeds and uploading receipts, the quarterly updates will require little more than a quick review and click in your chosen software.

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