INDUSTRY NEWS

Making Tax Digital: Tackling the tricky transition

Chris Norris 8 January 2026

The first Making Tax Digital (MTD) deadline is just three months away for hundreds of thousands of landlords. Here NRLA chief policy officer Chris Norris examines what the changes mean, and how you can make the transition as painless as possible.

There can be no denying it, 2026 is going to be challenging for most landlords in England.

Just like the proverbial London bus, generational changes to business practices will arrive in threes this year, in the form of the Renters’ Rights Act, announcements on new energy efficiency rules and the roll out of Making Tax Digital to landlords.

What exactly is Making Tax Digital?

To give it its full title, Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA, or just MTD from this point on) is just over the horizon for individuals with qualifying income in excess of £50,000pa.

From April, those of you with sufficient rental income (income, not profit) will no-longer be able to use the self-assessment process for Income Tax. Instead, you will be required to file quarterly reports using approved software, directly linked to HMRC.

Whilst undeniably a nuisance, I don’t want to talk up the difficulties of switching.

It won’t represent higher tax bills, although most software packages will come at a cost. It might even prove helpful in the long run to aid revenue and expenditure tracking.

So what's the problem?

Maybe nothing. Let’s look at this in context. We can whittle down the cohort of landlords for whom this is a pressing concern quite significantly.

To begin with you don’t need to be (immediately) concerned if:

Your qualifying income for the last reported year was below £50,000 and you believe this will still be the case for 2026-27. Taking into account it is only your share of income from any joint property that is taken into account, this will exclude the majority of private landlords in year one.
Your property income is via a limited company and therefore subject to Corporation Tax. This could be all of your property income, or just part of your business, but if it reduces your qualifying income to below £50,000 then you will not be in scope of year one.
You can legitimately argue that you are ‘digitally excluded’. Most cannot, but if you have a genuine health condition, disability, or religious restriction that prevents you from using a computer or similar you may qualify for an exemption.

Beyond those groups listed above, if you employ a tax agent (accountant) to manage your tax affairs – provided they are competent and you discuss your arrangements with them ahead of April – you should also have very little to be concerned about.

Estimates vary, but this likely leaves fewer than one in five landlords in the UK likely to have to contend with MTD for ITSA in 2026, although this number will rise year on year as the income threshold is reduced.

How can we help?

Among NRLA members, we estimate this figure to be a little higher, and have developed our Portfolio system to help with the transition.

However, even if 20 per cent of landlords are in scope for 2026, this could mean more than half-a-million taxpayers moving to MTD. And that is where the confusion is likely to set in.

Firstly, polling suggests that only around a third of landlords have taken any steps to prepare.

The second issue is all about multitasking.

For a large proportion of you, April will simultaneously be the moment when you are:

Preparing to transition any existing ASTs to periodic tenancies from 1st May (when the Renters’ Right Act comes into force) and potentially bringing failing tenancies to an end before the reforms bite.
Finalising tax year 2025-26, a process that for many will not be fully resolved until the following January (absolutely no judgement here).
Starting to record income and expenditure on compliant software for tax year 2026-27.

For those with more complicated (but increasingly common) tax arrangements involving properties managed through limited companies, yet another layer of complexity adds to the potential for errors in recording, allocation, or interpretation.

It is quite conceivable that a landlord who holds some properties individually, some through a company – and has a relatively high qualifying income – could be dealing with a self-assessment tax return, their first quarterly MTD reports, and a Corporation Tax return in a short space of time.

What's the solution?

In short being very diligent.

The lowest hassle compliance solution is probably appointing a good accountant, and for landlords with complex tax affairs or who are worried about mistakes, this is probably a good option.

However, the majority of you who want to manage your own affairs should be able to, if they get proper processes in place.

In practical terms, this means some of us must acknowledge the importance of real time admin, as opposed to waiting until three weeks before the reporting deadline to tidy-up out spreadsheets for the last financial year.

The latter may work with one simple return per-year but is a sure-fire route to chaos in 2026.

We all need to start considering whether the system or software we use is up to scratch, irrespective of if we need to start using MTD this year or not.

Fortunately, you don’t need to take the leap in one go. NRLA Portfolio Plus allows users to use Open Banking to securely import income and expenditure data, which is then categorised according to your properties and businesses ready for self-assessment, MTD, or anything else that might come along.

As this uses live bank feeds and provides real time tracking it should make mistakes much less likely and considerably speed up the production of quarterly reports and annual returns.

Don’t tell me this whole article was a sales pitch…

Only a little bit.

Of course, we at the NRLA want landlords to use our services, we trust them and believe they make it easier for members to run their businesses.

Compliance is key

The important thing is that 2026 is going to all about compliance. Ensuring compliance. Maintaining compliance. And perhaps most importantly, demonstrating compliance.

In the past that has been a manual process, usually involving a wet signature, or proof of postage, or witness statements. In today’s PRS it can be prompted, automated, and electronically filed reducing effort and risk – if you plan ahead and make the tools available work for you.

As a bare minimum landlord in England need to be confident that they are evidencing their shift to RRA, itemising their efforts to meet energy efficiency targets, and (obviously) properly reporting their income and expenditure.

What is critical is that we don’t allow a potentially challenging transition to become the new norm.

More information

For more information you can find our free and comprehensive ⁠Making Tax Digital (MTD) guide here. You can also take advantage of our exclusive MTD eClassroom course. The course runs through everything you need to be MTD ready, with the opportunity to ask questions of our qualified tax trainers.

You will also be able to submit your returns directly to HMRC via the NRLA’s ⁠Portfolio property management platform, which allows you to run your rental business directly through your NRLA account.

You can hear more about the Making Tax Digital plans by listening to our podcast, Listen Up Landlords, below.

Relevant Topics

Chris Norris is responsible for policy and campaigns at the National Residential Landlords Association (NRLA), having held a similar role at the NLA prior to its recent merger.

A private landlord and former letting agent himself, Chris has represented landlords for more than a decade, joining the NLA’s policy team in early 2007.

Before discovering the fun that can be had focussing on the PRS, Chris held a number of inhouse and consultancy public affairs roles focussing on housing, health, and social care.