Making Tax Digital is often viewed as a compliance challenge. However, it could also be the perfect opportunity to review your portfolio, borrowing arrangements and long-term property strategy.
What is Making Tax Digital?
Making Tax Digital for Income Tax (MTD IT) is part of HMRC's wider programme to modernise the UK tax system by introducing digital record keeping and reporting requirements.
The changes are being introduced in stages.
From April 2026, landlords with combined gross rental and self-employment income above £50,000 have been required to comply with the new rules. From April 2027, the threshold reduces to £30,000.*
For relevant landlords, this means maintaining digital records and providing more regular updates through compatible software rather than relying solely on an annual tax return.
Why you should start thinking about it now
While the implementation dates may still feel some distance away for some landlords, becoming familiar with the requirements ahead of time may help make the transition easier.
MTD is likely to encourage many landlords to review:
• Record-keeping processes
• Bookkeeping systems and software
• Income and expenditure tracking
• Portfolio reporting
• Relationships with accountants and advisers
Preparing in advance may help landlords understand what changes might be needed before compliance becomes mandatory.
Could Making Tax Digital give you better visibility?
Rather than reviewing property finances once a year when preparing a tax return, landlords may find that more regular digital record keeping provides a clearer ongoing picture of portfolio performance, helping them identify trends, monitor costs and make more informed decisions throughout the year.
Having easier access to information about rental income, expenditure and property performance may help you make decisions more quickly when opportunities or challenges arise.
For example:
• Assessing whether an existing mortgage remains competitive
• Preparing for refinancing or remortgaging discussions
• Reviewing the viability of a future property purchase
• Planning refurbishment or energy efficiency improvements
• Understanding the impact of rising costs on portfolio profitability
Rather than seeing MTD purely as an administrative change, some landlords may view it as an opportunity to improve visibility across their property finances and wider investment strategy.
Five practical steps you can take now
1. Review how records are kept
Understanding how rental income and expenses are currently recorded can help identify whether any changes may be needed before MTD requirements take effect.
2. Speak to your accountant or tax adviser
Professional tax advice can help you understand how MTD applies to your individual circumstances and what obligations may arise. Check out our Trusted Partners page for more information on speaking to a tax adviser.
3. Understand where you sit against the income thresholds
Knowing whether and when MTD may apply to you can help inform future planning.
4. Review wider portfolio plans
You may also be considering future borrowing, remortgaging, property improvements or portfolio growth. MTD preparation can naturally sit alongside those conversations.
5. Start planning early
Becoming familiar with the requirements now may give you more time to review your systems and processes before the new reporting requirements apply.
A useful prompt for a portfolio review?
Making Tax Digital is just one of several significant changes affecting landlords.
Alongside evolving regulation, future EPC requirements and changing market conditions, landlords may find that this is a useful moment to take stock of their wider property strategy.
While Alexander Hall does not provide tax advice, we regularly help landlords review mortgage arrangements, refinancing options and portfolio plans. For some investors, a tax change such as MTD may simply provide the prompt they need to take a fresh look at the bigger picture.
If you'd like to discuss your buy-to-let mortgage options or review your current arrangements, book an appointment with one of our advisers today.
This is for information only. Mortgage products and rates vary depending on your circumstances, lender criteria and products available at the time. We’ll explain these before you decide to proceed.
Tax rules depend on your personal circumstances and may change. We recommend that you take independent tax advice before making these decisions.
* Gov.uk
