MTD software for landlords: UK property quarterly updates

You must use Making Tax Digital for Income Tax if you are registered for Self Assessment, you have property or self-employment income, and your qualifying income is more than the threshold. HMRC uses the tax return you sent for an earlier year to decide.

The thresholds fall over three years. More than £50,000 on your 2024 to 2025 return means you start on 6 April 2026. More than £30,000 on your 2025 to 2026 return means 6 April 2027. More than £20,000 on your 2026 to 2027 return means 6 April 2028. Qualifying income of £20,000 or less is automatically exempt.

HMRC writes to landlords it thinks are over the threshold, and has started signing people up itself. If you do not get a letter, checking is still your responsibility.

Qualifying income is your rent and other property income before expenses, added to any self-employment turnover. It is not your rental profit. A landlord who owns their properties alone and collects £36,000 a year in rent has £36,000 of qualifying income, however much the mortgage and repairs cost.

If you are UK resident, foreign property income counts as well as UK property. If you own a property jointly, only your share counts. HMRC’s own example is a £50,000 jointly let property split equally, which gives each owner £25,000 of qualifying income. If you are only told your share after expenses, HMRC uses that figure.

• Counts: rent, lease premiums and other UK property income, before expenses.
• Counts for UK residents: foreign property income.
• Counts: your self-employment turnover, if you have any.
• Does not count: employment pay, dividends, pensions or a partnership share.

However many UK properties you let, HMRC treats them as one UK property business. Your share of any jointly let property is part of it too. That business sends one quarterly update, not one per property.

Each update covers the tax year so far. The standard deadlines are 7 August, 7 November, 7 February and 7 May, the same as for sole traders. The update holds totals for HMRC’s property categories, the ones you know from the SA105 UK property pages: total rent, other property income, lease premiums and expenses, with residential finance costs on a separate line.

You keep digital records only for your share of a jointly let property. HMRC allows one entry per income category for each update period and one entry per expense category for the year. You do not need to link your records to the other owner’s.

HMRC also lets you send only the income for jointly let properties during the year. You then add the expenses by sending your fourth update again after the year ends, before you submit your tax return. Properties you own alone still need income and expenses in every update.

In SimpleTaxFlow, each owner uses their own account. Upload your share of rent and costs from your own linked spreadsheet, or enter figures in Bookkeeping and choose whether they are for the whole property or your share.

If you let residential property as an individual, you cannot deduct mortgage interest and other finance costs as an expense. Instead HMRC gives a tax reduction at the basic rate, currently 20%, of the lowest of three figures: your finance costs, your property profits, or your adjusted total income above the personal allowance. Any unused amount carries forward, and the reduction cannot create a refund.

Finance costs include mortgage interest, interest on loans for the property or its furnishings, overdraft interest and arrangement fees. Only the interest part of a mortgage payment counts, never the capital. Interest on loans for non-residential property is still an ordinary expense.

Because the treatment is different, residential finance costs go on their own line in your quarterly update, even if you use Simple. SimpleTaxFlow always keeps them separate, in Bookkeeping, in the template and in the figures you check before sending.

HMRC’s simpler categorisation applies to landlords whose total UK property turnover is under £90,000, including joint lets. You then send total income and total expenses, with residential finance costs still separate. If property turnover reaches £90,000, you must split all of the year’s property records into HMRC’s categories before your next update.

In SimpleTaxFlow you answer the turnover question once for your UK property business each tax year. Choose No, use Simple for one expenses total, or Yes, use Detailed for HMRC’s property expense categories. If you are unsure whether you will reach £90,000, HMRC says to use the full categories from the start.

A fictional landlord owns two flats on their own, with rent of about £24,000 a year. That is under £90,000, so they use Simple. Their first update covers 6 April to 5 July.

Their profit for the update is rent less expenses. The mortgage interest is not taken off. It goes on its own line, and HMRC works out the tax reduction when it calculates the year.

The furnished holiday lettings tax regime ended on 6 April 2025 for Income Tax and Capital Gains Tax. A former holiday let now follows the normal property rules. If it is in the UK, it is part of your UK property business like any other UK let.

That means the finance cost restriction applies to its loan interest, replacement of domestic items relief is available for new spending, and the income no longer counts as relevant earnings for pension relief. Existing capital allowance pools carry on until they are used up.

Landlords who are new to MTD tend to trip over the same few points.

Most of them change what HMRC receives, so they are worth checking before your first update.

• Testing qualifying income on rental profit instead of rent before expenses.
• Sending an update for each property. All UK properties form one business.
• Counting the whole of a jointly let property instead of your share.
• Including mortgage capital repayments. Only the interest counts as a finance cost.
• Claiming improvements as expenses. Capital spending, such as an extension, is not allowable.