With the next Making Tax Digital (MTD) for Income Tax quarterly deadline approaching on 7 November, official figures suggest that many landlords have yet to transition to digital reporting. Exclusive Freedom of Information (FOI) data obtained by property management platform Landlord Studio reveals a modest pace of adoption over the summer.

Between the first major submission date on 6 August and 21 September, sign-ups to MTD for Income Tax among taxpayers with UK property income increased by just 5%. This represents an additional 7,900 taxpayers, moving total registrations from approximately 155,500 to 163,400.

Given that MTD represents a fundamental shift in HMRC compliance, the data indicates that a significant proportion of affected property owners still need to sign up.

Breakdown of the FOI findings

The FOI response provided by HM Revenue & Customs (HMRC) outlines recent registration and software adoption trends:

• UK property income: Direct sign-ups rose from 155,500 (6 August) to 163,400 (21 September) - a 5% increase

• Foreign property income: Registrations saw a parallel 5% gain, moving from 6,200 to 6,500 (an increase of approximately 290 taxpayers)

• Software authorisations: MTD-compatible software authorisations linked to HMRC grew by approximately 7%, rising from 285,200 on 10 August to 304,800 on 21 September

While software authorisations indicate steady engagement with digital tools, the overall growth rate in formal sign-ups remains steady rather than accelerating ahead of the upcoming deadline.

Expanding scope and compliance risks

Transitioning from an annual Self-Assessment tax return to quarterly digital reporting requires adjustments to accounting processes and software integration. Delaying these arrangements until immediately before a filing deadline increases the operational burden and risk of non-compliance.

Commenting on the dataset, Logan Ransley, Co-Founder of Landlord Studio, notes:

“What stands out from these figures is how little sign-ups have moved since the first quarterly deadline. A rise of around 5% in six weeks suggests a slow trickle rather than a rush to catch up. With the next deadline in November, it looks like many landlords are still not prepared.

“This is only the start. From April next year, more landlords will be brought into MTD, and those who don't comply could face penalties. Moving from once-a-year Self-Assessment to digital records and quarterly reporting takes time to set up, so leaving it late is risky.”

From April 2027, the mandatory threshold for MTD for Income Tax will extend to individuals with qualifying property and self-employment income over £30,000, bringing more of the sector within scope.

Practical steps for property owners

While digital compliance introduces additional administrative considerations, establishing appropriate systems early allows landlords to streamline record-keeping and maintain clearer oversight of portfolio performance.

Recommended actions ahead of November:

1. Check your status: Review gross property income against HMRC guidelines to determine whether current reporting requirements apply, or prepare for the April 2027 threshold

2. Implement compatible software: Transition from paper records or standalone spreadsheets to HMRC-recognised MTD software or specialised property management platforms

3. Establish regular record updates: Maintaining income and expense logs on a monthly basis simplifies the preparation required for quarterly submissions.

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