Money Matters

Making Tax Digital for Income Tax: How accountants can work with landlord clients

MTD for Income Tax affects landlords with qualifying property or combined property and sole trader income above the relevant thresholds. Learn how your practice can support landlord clients from April 2026 and beyond.

Published 3 March, 202611 min read Share

Making Tax Digital (MTD) for Income Tax changes how affected individuals keep records and report Self Assessment income to HMRC.

For landlords, this means many clients who receive direct property income may need digital records, MTD-compatible software, quarterly updates, and a final digital tax return if their qualifying income is above the relevant threshold.

For accountants, the change creates a practical client support challenge.

Some landlord clients will already have organised records and software.

Others may have a small number of rental transactions each year, use spreadsheets or paper records, or only think about their property income when preparing their Self Assessment return.

That makes now a good time to review your landlord client base, identify who is likely to be affected, and plan how your practice will explain the requirements without overwhelming clients.

Key takeaways

• MTD for Income Tax applies to landlords who receive property income directly and meet the qualifying income threshold.
• The rollout starts with individuals with qualifying income over £50,000 from April 2026, then over £30,000 from April 2027, and over £20,000 from April 2028.
• Incorporated property businesses are not affected by MTD for Income Tax in the same way as individuals receiving direct property income.
• Accountants can help landlord clients by identifying who is in scope, explaining digital record keeping, and moving clients to MTD-compatible software.
• The biggest client communication challenge is likely to be smaller landlords who have simple rental income but limited accounting processes.

Here’s what we cover:

Why accountants should prepare their landlord clients

UK landlords are impacted by MTD for Income Tax from April 2026 if their rental income, or their combined rental and sole trader income, is above the MTD for Income Tax threshold of £50,000.

If their rental income, or combined rental and sole trader income, is below £50,000 but above £30,000, they will be impacted from April 2027.

If it is above £20,000, they will be impacted from April 2028.

In practical terms, this means many landlord clients may be affected over time, especially where property income is combined with sole trader income.

Landlords are not always typical accountancy clients.

There is substantial legislation around property letting and ownership, and landlord client types can vary widely.

At one end of the scale are individuals who let a single property, let part of their own home, or own a share of a rental property.

At the other end are those with larger property portfolios who may describe themselves as professional landlords.

HMRC guidance explains how property income is taxed and when a landlord may be treated as running a property business.

Read HMRC guidance on renting out a property

Some practices may also have incorporated clients that declare property revenue. MTD for Income Tax only affects individuals who receive direct personal income from property rental, or their share of it.

Rental income from properties managed through an incorporated company is not affected by MTD for Income Tax.

There are three practical issues for accountants to consider now:

1. Skills and knowledge gaps

Providing accounting services for landlords can be specialised.

Your practice may need additional property tax knowledge, process training, or clearer internal guidance before more landlord clients ask for support.

Because the first phase of MTD for Income Tax came into effect in April 2026, it may be worth reviewing your practice readiness and identifying any urgent training needs.

Continuing Professional Development (CPD) will remain important as MTD processes and landlord questions evolve.

2. Lack of awareness

Some smaller landlords may not realise MTD for Income Tax applies to property income.

Others may think it only affects sole trader income, or may not have a clear understanding of their current Self Assessment obligations.

That means practices may receive more questions from landlords as the entry thresholds widen in April 2027 and April 2028.

Some of those conversations may also involve retrospective accounting work where records are incomplete or out of date.

3. Dated accounting methods

For some landlords, accounting for rental income may be an afterthought.

They may use a spreadsheet, a paper ledger, a notebook, or bank statements reviewed once a year.

As well as helping them move to suitable software, part of your work may involve explaining basic income tax processes, the importance of keeping digital records, and how MTD for Income Tax changes the rhythm of reporting.

Some smaller-scale landlord clients may question why they need software when they only receive a small number of rental payments each year.

Clear, practical communication will be important because the requirement is based on the rules, not on how complex the landlord feels their records are.

Three questions to ask yourself and your staff

Here are three questions you might ask within your practice when focusing on MTD for landlords.

1. Is MTD for Income Tax an opportunity for growth?

For the accounting profession, the introduction of MTD for VAT created new client service opportunities.

MTD for Income Tax may do the same, especially because it affects sole traders and landlords who may not currently use accounting software or structured digital processes.

Supporting sole trader clients may already be part of your practice plan. Supporting a larger number of landlord clients may require a more deliberate decision.

You may want to ask:

• Do you want landlord clients to become a bigger part of your practice?
• Do you have the skills, capacity, and systems to support them?
• Do you need new onboarding, pricing, or communication processes?
• Could you create a referral arrangement with another practice that specialises in property income?

Even if you decide not to grow this area of work, understanding the rules as they relate to property income is a sensible minimum.

It will help you brief existing clients and respond to prospective clients with confidence.

2. Do you need to gain expertise in property accounting?

Landlord accounting is rarely one-size-fits-all.

Relevant situations can include landlords who live overseas, clients using the Rent a Room scheme, jointly owned property, property held as a retirement investment, and clients with larger portfolios.

To refresh your knowledge, start with HMRC’s Property Income Manual. Sections within this manual are numbered with codes that begin with PIM.

It is also worth reviewing HMRC’s Property Rental Toolkit, which is designed to help tax agents and advisers identify risks in relation to property income.

Your membership body may also offer property tax guidance, training, or technical support.

 Where relevant, you may want to investigate specialist property qualifications or training from professional bodies and property sector organisations.

Some qualifications are available from other bodies, including those aimed at estate agents, such as Propertymark.

The right training mix will depend on the type of landlord clients you want to support.

For some practices, property knowledge may become part of a broader full-service offer.

For others, a referral partnership may be more appropriate.

3. What accountancy services might landlords need because of MTD for Income Tax?

Start by reviewing what landlord clients are likely to ask for, then decide which services your practice can realistically provide.

Possible service areas include:

• MTD readiness reviews for landlord clients
• Client segmentation by income threshold and likely start date
• Software setup and digital record-keeping support
• Quarterly update support
• Annual digital tax return support
• Property income record clean-up where previous years are incomplete
• Tax planning conversations where appropriate
• Referral support for clients who need specialist property tax advice

You may also want to review competitor practice websites, client questions, and common landlord search terms.

This can help you understand how other firms package MTD support and where your practice can offer something more useful or more specific for your clients.

As you might expect, areas such as tax planning and financial statement preparation may also be important where landlords use finance as part of their property strategy.

If you are approached by landlords who have not kept clear records in previous years, you may need to spend time reconstructing earlier information before you can support them with MTD for Income Tax.

That work can be labour intensive and should be scoped carefully.

Tips to communicate the changes to landlords

As with any aspect of Making Tax Digital, the challenge for many practices will be explaining what is required in a clear and practical way.

New client acquisition and onboarding processes may need to be adjusted as more landlord clients become affected from April 2027 and April 2028.

You can use the communication channels that worked for MTD for VAT and other MTD for Income Tax work, such as webinars, newsletters, video calls, and client review meetings.

Use regular client touchpoints to ask whether clients receive rental income and whether they declare it through Self Assessment.

 For example, you could add a short note to an email signature, include a prompt in client checklists, or raise MTD for Income Tax during existing tax planning conversations.

You may also choose to market specifically to landlords.

Practical options could include working with local estate agents, property auctioneers, or landlord groups to run educational webinars or workshops.

What this means for your practice – Identify landlord clients early, rather than waiting for them to ask. – Segment clients by income level and likely MTD start date. – Decide which services you will offer in-house and which may need a referral route. – Prepare plain English client messaging that explains digital records, software, quarterly updates, and the final tax return.

MTD for Income Tax processes to make landlord clients aware of

Converting existing landlord clients to MTD for Income Tax should be a priority over the coming years.

This involves education, digital record keeping, and moving affected clients to compatible software.

These are the key points and process requirements to explain to clients.

Software

Landlords within scope of MTD for Income Tax must use MTD-compatible software for their income tax accounting.

If they use additional software that holds relevant accounting data, such as a property management app, the accounting data should have a digital journey before it is submitted to HMRC.

Read: MTD digital links explained: Avoid penalties, understand how to move data

Many landlords have simple accounting needs and may currently use a spreadsheet, a paper ledger, a notebook, or annual bank statement reviews.

The client conversation may need to start with what records they have now, before you explain what needs to change.

Keeping digital records

Digital record keeping may be one of the more difficult changes to explain to smaller landlords.

If a landlord only receives a limited number of rent payments each year, software may feel disproportionate to them.

It may help to connect the discussion to the wider information they already need to understand their property income, including expenses, deposit payments, capital allowances, reliefs, and other property-related records.

Periodic updates at least quarterly

Some landlords may question the usefulness of quarterly updates if their rental income is predictable.

Explain that quarterly updates are part of MTD for Income Tax and must be sent through compatible software.

You can also explain how software can automate much of the work and that quarterly updates are not expected to be the same as a final year-end tax return.

Digital tax return

Landlords with relatively simple affairs may see the digital tax return as duplication after submitting quarterly updates.

To address this, explain that quarterly updates provide regular summaries of income and expenditure, while the final digital tax return brings together the individual’s full tax position for the year.

Accounting software can help reduce the manual work required each January, making the process more manageable for clients who have kept accurate digital records throughout the tax year.

Final thoughts on support for landlord clients

MTD for Income Tax is a significant change for landlords and for the practices that support them.

For some landlord clients, the change will mainly mean moving existing records and processes into compatible software.

For others, it may be the first time they have kept property income records in a structured digital way.

Your practice can add value by being clear, practical, and proactive. Start by identifying affected landlord clients, reviewing the support you can provide, and creating simple messaging that explains what clients need to do and when.

There are reasons to start Making Tax Digital for Income Tax early, so encouraging clients to prepare ahead of their mandation date can help reduce last-minute pressure.

Editor’s note: This article was first published in March 2022 and has been updated for relevance.

Frequently asked questions about MTD for Income Tax and landlord clients

Editor’s note: This article was first published in March 2022 and has been updated for relevance.

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