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17/12/25 3:30 pm
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UK landlords are increasingly uneasy about the rollout of Making Tax Digital (MTD), with a new survey suggesting most still lack clarity on what is required just months before the first compliance deadlines.
Exclusive January polling of 305 landlords by rental management app August found that 87.5% are worried to some degree about the new digital tax regime. More than a third (35.7%) described themselves as very worried, while a further 51.8% said they were a little worried. Only 12.8% said they are very confident they understand what MTD entails, pointing to widespread uncertainty across the sector.
The changes formally begin on 6 April 2026 for landlords and sole traders with qualifying income (gross) over £50,000 in the previous tax year. For those using standard update periods, the first quarterly update deadline will be 7 August 2026, making the timeline for preparation increasingly tight.
Confidence gap ahead of major reform
Nearly half of respondents (48.2%) said they lack confidence in their understanding of MTD. This includes 32.1% who said they are not confident at all, and 16.1% who said they are actively concerned about the practical requirements of compliance.
August says the findings highlight a growing “readiness gap”, with landlords aware that change is imminent but unsure how to prepare or what actions are required.
Major change: digital records and quarterly updates
MTD for Income Tax Self-Assessment (MTD ITSA) represents one of the biggest shifts in property taxation in recent years. Under the new system, affected landlords must use HMRC compatible digital software to keep records and submit quarterly updates on income and expenses. This is followed by an end-of-year finalisation, rather than replacing the annual process entirely.
The rollout is phased:
• April 2026: qualifying income (gross) over £50,000
• April 2027: qualifying income (gross) over £30,000
• April 2028: qualifying income (gross) over £20,000
This could ultimately bring hundreds of thousands more landlords into the regime, according to the NRLA guidance on Making Tax Digital for landlords.
Confusion over eligibility and compliance
The survey suggests many landlords misunderstand how MTD applies. Nearly half believed that profit levels, business structure, or using an accountant could affect whether they must comply. In reality, MTD is triggered solely by qualifying income (gross) thresholds from property and/or self-employment, regardless of who prepares the accounts.
What landlords should do now
With the first MTD start date approaching, landlords are advised to:
• Check whether their qualifying income (gross) meets the MTD thresholds
• Register for HMRC-compatible digital accounting software (guidance here)
• Seek advice from accountants or advisers on quarterly updates and end-of-year finalisation
Samuel Cope, founder of August, said:
““For a reform this big, HMRC hasn’t prepared landlords properly. Making Tax Digital is seismic and guidance clearly hasn’t cut through. Year-one penalties for non-compliance are far too strict and should be waved as landlords navigate the evolving requirements.”
HMRC reassurance
HMRC has said that while quarterly updates will be mandatory, penalty points for late quarterly submissions will not be applied during the first 12 months of MTD ITSA, provided landlords make a reasonable attempt to comply. For detailed guidance, see the HMRC step by step guide for MTD for businesses.
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