What is MTD ITSA for landlords?
Making Tax Digital for Income Tax Self Assessment (MTD ITSA) replaces the traditional annual Self Assessment return for landlords and sole traders with a continuous cycle of quarterly digital updates submitted directly to HMRC throughout the year. The annual return does not disappear entirely — it is replaced by a year-end End-of-Period Statement (EOPS) and a Final Declaration — but the bulk of the reporting moves to four quarterly submissions.
In plain English: instead of reporting your rental income once a year in January, you will report a summary to HMRC every three months and keep digital records in HMRC-recognised software throughout the year.
Who is affected — and when?
HMRC is phasing in MTD ITSA based on combined gross income from self-employment and UK property:
| Start date | Income threshold |
|---|---|
| **6 April 2026** | Gross income ≥ £50,000 |
| **6 April 2027** | Gross income ≥ £30,000 |
| **6 April 2028** | Gross income ≥ £20,000 |
The threshold is based on your gross income (before expenses) from UK property and self-employment in the previous tax year. If your 2025/26 rental income plus any self-employment income was above £30,000, you are in scope from 6 April 2027.
Landlords with combined income below £20,000 are not mandated under current plans, though the government has said this will be reviewed.
What property income counts?
MTD ITSA covers:
- UK residential and commercial lettings — buy-to-let, HMOs, rooms let under the Rent a Room scheme (above the £7,500 threshold), and commercial premises
- Short-term lets and serviced accommodation — these were previously under the Furnished Holiday Lettings (FHL) regime, which was abolished from 6 April 2025. All former FHL income is now treated as UK property income and counts towards the MTD threshold
- Overseas property income — if you are UK tax resident with rental income from abroad, this is included in your overall income for threshold purposes and must be reported in MTD-compatible software (as a separate overseas property business)
For jointly-owned properties, only your share of the gross rent counts towards your threshold.
What you actually need to do
MTD ITSA replaces the once-a-year Self Assessment process with a four-step cycle:
### 1. Keep digital records from day one
All rental income and allowable expenses must be recorded digitally in MTD-compatible software from the first day of your mandated tax year. There is no grace period — HMRC expects digital records from the start. Paper receipts are fine as source documents, but the entries must be in your software.
### 2. Submit four quarterly updates
At the end of each quarter you send HMRC a summary of income and expenses for each of your property businesses. The deadlines are:
| Quarter | Period | Due date |
|---|---|---|
| Q1 | 6 April – 5 July | 5 August |
| Q2 | 6 July – 5 October | 5 November |
| Q3 | 6 October – 5 January | 5 February |
| Q4 | 6 January – 5 April | 5 May |
You are submitting a summary, not every transaction — but the transactions must exist in your software if HMRC asks.
### 3. Submit an End-of-Period Statement (EOPS)
After the tax year ends (5 April), you confirm your final income and expenses for each property business in an EOPS. This is where you make year-end adjustments such as capital allowances, prior-year losses and balancing adjustments that were not captured in the quarterly summaries.
### 4. Submit a Final Declaration
The Final Declaration combines all your income sources — employment (PAYE), self-employment, property, savings and dividends — and calculates your total income tax and NI for the year. It replaces the traditional Self Assessment return. The deadline is 31 January following the end of the tax year — the same date as the old return.
What happens if I miss a quarterly update?
HMRC's new penalty points system applies. Each missed quarterly submission earns one penalty point. When you reach the threshold (4 points in a year for quarterly filers), a £200 financial penalty is charged — plus £200 for every subsequent late filing. Points reset only after 24 consecutive on-time submissions.
This means missing one quarter is not immediately expensive, but repeated lateness quickly becomes costly. Unlike the old £100 automatic penalty, the points system is designed to penalise a pattern of non-compliance rather than a single slip.
Do I still need an accountant with MTD?
Yes — and MTD makes collaboration easier, not harder. Because your records are live in the software throughout the year, your accountant can review your position at any time, flag issues before deadlines, and submit the EOPS and Final Declaration on your behalf.
The quarterly updates are relatively simple — a summary of income and expenses your software compiles automatically. The accountant-intensive work (capital allowances, loss relief, personal finance integration) still happens at EOPS time.
How to prepare before April 2027
Now (12+ months before): Start using digital record-keeping even if you are not yet mandated. Getting used to the workflow before you have to is far easier than a forced migration in March 2027. See our Making Tax Digital hub for how the full ITSA cycle works.
October 2026 (6 months before): Confirm with your accountant that your software is on HMRC's recognised list and that they will be handling EOPS and Final Declaration submissions.
January 2027 (3 months before): Connect your rental bank account(s) to your software, categorise any existing transactions for the current tax year, and complete a test quarterly update using HMRC's sandbox.
March 2027 (1 month before): Confirm your software is linked to your Government Gateway account. Your first quarterly update (for Q1 of 2027/28, due 5 August 2027) should submit without issues.
How Finovo supports landlords
Finovo covers all four stages of the MTD ITSA cycle — digital record-keeping via automated bank feeds, quarterly updates, EOPS and Final Declaration — in one workspace. Rental income and expenses are categorised automatically from your bank feed. At each quarter-end, Finovo compiles the quarterly update and submits directly to HMRC's API without you needing to visit the HMRC portal.
If you have both property income and self-employment income, Finovo tracks both business types in the same subscription, at no extra cost.
Use our free MTD checker to confirm exactly when your obligation starts based on your income level. Start a free trial to get ahead of the April 2027 deadline.