# How Do UK Landlords Comply with Making Tax Digital Phase 1 in 2026?

Last updated: 23 September 2026

Sole traders and landlords with qualifying income over £50,000 must transition to Making Tax Digital for Income Tax Self Assessment (MTD ITSA) from April 2026. Compliance involves maintaining digital records, submitting quarterly updates, and completing an End of Period Statement and Final Declaration using HMRC-compatible software.

Key compliance points:

- **Eligibility Threshold:** Qualifying income over £50,000 for 2024/25 tax year.
- **Start Date:** Mandatory from April 2026 for eligible landlords.
- **Filing Frequency:** Four quarterly updates, an End of Period Statement, and a Final Declaration annually.

[View HMRC Guidance](https://www.gov.uk/guidance/help-and-support-for-making-tax-digital)

## Introduction to Making Tax Digital for Landlords

Making Tax Digital (MTD) is a fundamental shift in how HMRC requires businesses and individuals to manage their tax affairs. For landlords and sole traders, this transition impacts Income Tax Self Assessment (ITSA). From April 2026, MTD ITSA becomes mandatory for landlords with qualifying income exceeding £50,000. This means a move away from annual tax returns to a system of digital record keeping and regular, quarterly updates submitted directly to HMRC via MTD-compatible software.

This comprehensive guide outlines everything UK landlords need to know to achieve full compliance with MTD ITSA Phase 1. We will cover eligibility criteria, key dates, the step-by-step process of digital record keeping and submissions, understanding allowable expenses, and the potential penalties for non-compliance. Our aim is to provide a clear, authoritative reference document that empowers landlords to prepare effectively for this significant change, leveraging tools like AccountsOS to streamline the process.

Understanding and preparing for MTD ITSA is crucial to avoid penalties and ensure a smooth transition. This guide will serve as your essential resource to navigate the new requirements.

## What is Making Tax Digital for Income Tax Self Assessment (MTD ITSA)?

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) represents HMRC's initiative to modernise the tax system, making it more efficient, effective, and easier for taxpayers to get their tax right. Instead of submitting a single annual Self Assessment tax return, MTD ITSA requires a more frequent, digital approach to reporting income and expenses.

### The Core Principles of MTD ITSA

MTD ITSA is built upon four fundamental requirements that landlords must adhere to:

- Maintain digital records of all property income and expenses.
- Submit quarterly income and expense summaries to HMRC via MTD-compatible software.
- Submit an End of Period Statement (EOPS) for each property business annually.
- Submit a Final Declaration combining all income sources and reliefs.

### 1. Digital Record Keeping

Under MTD ITSA, landlords must keep digital records of all their property income and expenses. This means that traditional paper records will no longer suffice. Records must be stored in a digital format, typically within MTD-compatible software. This includes details of every transaction, such as the date, amount, category, and a description of the income or expense. The software must be able to securely store this information and allow for digital links between various data points. For instance, if you use a spreadsheet, it must be digitally linked to MTD bridging software, or preferably, you should use end-to-end MTD-compatible accounting software.

### 2. Quarterly Income and Expense Updates

Instead of an annual summary, landlords will need to submit summaries of their property income and expenses to HMRC four times a year. These "quarterly updates" are snapshots of your financial activity during specific periods. While these updates are not final tax calculations, they provide HMRC with a more real-time view of your earnings and outgoings, allowing for greater accuracy and potentially fewer errors at year-end. These updates must be submitted using MTD-compatible software.

### 3. End of Period Statement (EOPS)

After the final quarterly update for the tax year, landlords must submit an End of Period Statement (EOPS) for each property business. The EOPS allows for any necessary accounting adjustments that were not included in the quarterly updates. This could include adjustments for capital allowances, private use of assets, or any other year-end accounting entries required to calculate the final taxable profit or loss. The EOPS must also be submitted digitally via MTD-compatible software.

### 4. Final Declaration

The final step in the MTD ITSA process is the submission of the Final Declaration. This replaces the traditional Self Assessment tax return. The Final Declaration consolidates all sources of income, not just property income, but also employment income, savings interest, dividends, and any other taxable income. It also includes personal allowances, reliefs, and any other adjustments to arrive at your final tax liability for the year. This declaration must also be made digitally through MTD-compatible software or via an agent.

**Why the Shift to Digital?** HMRC aims to reduce errors, provide a more up-to-date view of tax liabilities, and simplify the tax process for businesses and individuals through digitisation. The goal is to make it easier for taxpayers to get their tax right and keep track of their financial affairs throughout the year.

## Who is Affected: Eligibility Criteria for Landlords under MTD ITSA

Not all landlords will be mandated into MTD ITSA from April 2026. The rollout is phased, with the initial phase targeting those with higher levels of qualifying income. Understanding these eligibility criteria is the first critical step for landlords.

### The Qualifying Income Threshold

From **April 2026**, MTD ITSA becomes mandatory for landlords (and sole traders) whose gross income from self-employment and/or property businesses exceeds **£50,000** in the previous tax year.

This means that to determine if you need to comply from April 2026, you must look at your total qualifying income for the **2024/25 tax year** (6 April 2024 to 5 April 2025). If this figure is above £50,000, you will need to join MTD ITSA for the tax year commencing April 2026.

A second phase will follow from **April 2027**, extending the mandate to those with qualifying income exceeding **£30,000** in the previous tax year. HMRC has stated its intention to review the extension of MTD ITSA to those with income below £30,000 in the future.

### What Constitutes 'Qualifying Income' for Landlords?

For landlords, "qualifying income" for MTD ITSA purposes refers to your **gross rental income** from all UK and overseas property businesses. It is important to note that this is your income before any expenses are deducted.

If you also operate a sole trader business, your gross income from that business will be added to your gross property income to determine if you meet the threshold. For example, if you have £30,000 gross rental income and £25,000 gross income from a sole trader business, your total qualifying income is £55,000, making you eligible for MTD ITSA from April 2026.

**Example: Calculating Qualifying Income.** A landlord has three UK properties:

- Property A: Gross annual rent £20,000
- Property B: Gross annual rent £18,000
- Property C: Gross annual rent £15,000

Total Gross Property Income = £20,000 + £18,000 + £15,000 = £53,000. Since £53,000 is above the £50,000 threshold for the 2024/25 tax year, this landlord will be mandated to join MTD ITSA from April 2026.

### Impact of Jointly Owned Properties

For jointly owned properties, each individual owner's share of the gross rental income is counted towards their personal MTD ITSA qualifying income threshold.

For example, if a property is jointly owned by two individuals, and generates £60,000 gross annual rent, each owner's share would typically be £30,000. In this scenario, neither individual would meet the £50,000 threshold based on this property alone. However, if one owner also has another property generating £25,000 gross rent, their total qualifying income would be £30,000 + £25,000 = £55,000, making them eligible for MTD ITSA.

### Exemptions from MTD ITSA

While MTD ITSA is becoming mandatory for eligible landlords, certain individuals and entities are exempt. These exemptions are generally for those for whom digital reporting would be genuinely impractical or inappropriate.

- **Digital Exclusion:** Individuals who are genuinely unable to use digital tools to keep records or submit updates due to age, disability, remoteness of location, or other reasons, and it is not reasonably practicable for them to do so. This is assessed on a case-by-case basis by HMRC.
- **Religious Belief:** Individuals whose religious beliefs prevent them from using electronic communications.
- **Insolvency:** Individuals who are subject to insolvency procedures, such as bankruptcy.
- **Non-resident landlords:** Who do not have a UK property business and whose only UK income is from property.
- **Trusts, Estates, and Limited Companies:** These entities are not currently within the scope of MTD ITSA. Limited companies are subject to MTD for Corporation Tax (when implemented), and trusts and estates have separate reporting requirements.
- **Partnerships:** General partnerships with only individuals as partners are expected to join MTD ITSA at a later date, but not in the initial phase for landlords and sole traders.

If you believe you qualify for an exemption, you must contact HMRC to apply. Do not assume you are exempt without confirmation from HMRC.

## Key Dates and Deadlines for MTD ITSA Landlords

MTD ITSA introduces a new rhythm of reporting, moving from a single annual submission to multiple digital interactions with HMRC throughout the tax year. Adhering to these new deadlines is paramount to avoid penalties.

### Phased Rollout Schedule

The mandatory start dates for MTD ITSA are:

- **April 2026:** For landlords (and sole traders) with qualifying income over £50,000 in the 2024/25 tax year.
- **April 2027:** For landlords (and sole traders) with qualifying income over £30,000 in the 2025/26 tax year.

### Quarterly Update Periods and Deadlines

The tax year runs from 6 April to 5 April. For MTD ITSA, income and expenses must be reported quarterly. The standard quarterly periods and their respective submission deadlines are:

| Quarterly Period | Submission Deadline |
| --- | --- |
| 6 April - 5 July | 5 August |
| 6 July - 5 October | 5 November |
| 6 October - 5 January | 5 February |
| 6 January - 5 April | 5 May |

It is possible to choose different quarterly periods if they align better with your business cycle, but you must notify HMRC of your chosen dates. The deadlines for submission will always be one month and a day after your chosen quarter end.

### End of Period Statement (EOPS) Deadline

The EOPS must be submitted by **31 January** following the end of the tax year. For example, for the tax year 2026/27 (ending 5 April 2027), the EOPS would be due by 31 January 2028.

### Final Declaration Deadline

The Final Declaration, which covers all your income sources, must also be submitted by **31 January** following the end of the tax year. This is the same deadline as the EOPS and the traditional Self Assessment tax return.

### Tax Payment Deadlines

Crucially, MTD ITSA does not change the tax payment deadlines. You will still need to pay your Income Tax by:

- **31 January** following the end of the tax year (for any outstanding tax for the previous year and the first payment on account for the current year).
- **31 July** (for the second payment on account for the current year).

**Example Timeline for Tax Year 2026/27 (for an eligible landlord):**

- **5 August 2026:** Q1 update (6 April - 5 July 2026) due.
- **5 November 2026:** Q2 update (6 July - 5 October 2026) due.
- **5 February 2027:** Q3 update (6 October - 5 January 2027) due.
- **5 May 2027:** Q4 update (6 January - 5 April 2027) due.
- **31 January 2028:** EOPS due for 2026/27.
- **31 January 2028:** Final Declaration due for 2026/27.
- **31 January 2028:** First payment on account for 2027/28 & balancing payment for 2026/27 due.
- **31 July 2028:** Second payment on account for 2027/28 due.

## Step-by-Step Guide to MTD ITSA Compliance for Landlords

Preparing for MTD ITSA requires a structured approach. This step-by-step guide will walk you through the necessary actions to ensure you are fully compliant by the April 2026 deadline.

### Step 1: Assess Your Eligibility and Review Exclusions

Your first task is to determine if you are required to join MTD ITSA.

- **Calculate Qualifying Income:** Review your gross income from all UK and overseas property businesses for the 2024/25 tax year. If you are also a sole trader, add your gross self-employment income to this figure. If the total exceeds £50,000, you are in scope for MTD ITSA from April 2026.
- **Consider Jointly Owned Properties:** Remember that for jointly owned properties, only your share of the gross rental income counts towards your individual threshold.
- **Check for Exemptions:** If you believe you meet any of the exemption criteria (e.g., digital exclusion, religious belief), you must contact HMRC to apply for an exemption. Do not assume you are exempt.

### Step 2: Choose MTD-Compatible Software

This is a critical decision, as MTD ITSA mandates the use of HMRC-recognised software for digital record keeping and submissions.

- **Identify Your Needs:** Do you need a full accounting solution that manages all your finances, or just bridging software to submit data from spreadsheets? For most landlords, a comprehensive solution that handles income, expenses, and MTD submissions is ideal.
- **Research HMRC-Recognised Software:** HMRC provides a list of software providers that are MTD-compatible. AccountsOS is designed to be fully compliant and user-friendly for landlords.
- **Consider Features:** Look for features like bank feed integration, automated expense categorisation, real-time tax estimates, and direct submission capabilities to HMRC. These features can significantly reduce the administrative burden.

### Step 3: Establish Digital Record Keeping Practices

Once you have chosen your software, you need to set up your digital record keeping.

- **Connect Bank Accounts:** Link your property bank accounts to your MTD software. This allows for automatic import of transactions, greatly simplifying data entry.
- **Categorise Income and Expenses:** Ensure all transactions are correctly categorised as either income or an allowable expense. Your software should offer pre-defined categories relevant to property businesses.
- **Retain Digital Proof:** Keep digital copies of receipts, invoices, and other relevant documents. Many software solutions allow you to attach these directly to transactions.
- **Review Regularly:** Make it a habit to review your digital records frequently, ideally monthly, to catch any errors or missing information promptly.

### Step 4: Sign Up for MTD ITSA with HMRC

Once your digital record-keeping system is in place, you need to officially register for MTD ITSA.

- **Register Online:** You can sign up for MTD ITSA through your HMRC online account. You will need your Government Gateway user ID and password.
- **Authorise Your Software:** During the sign-up process, you will be prompted to authorise your MTD-compatible software to communicate with HMRC. This creates the digital link for submissions.
- **Notify Your Accountant (if applicable):** If you use an accountant, inform them of your MTD ITSA registration. They will need to be authorised as your agent for MTD purposes through their own agent services account.

**Warning:** Do not sign up for MTD ITSA until you have MTD-compatible software in place and are ready to submit digital records. Signing up prematurely without the necessary systems can lead to compliance issues.

### Step 5: Submit Quarterly Income and Expense Updates

This is the core ongoing requirement of MTD ITSA.

- **Review Quarterly Data:** At the end of each quarter, use your MTD software to review the summary of your property income and expenses. Ensure all transactions are accurate and correctly categorised.
- **Generate and Submit:** Your MTD software will generate the quarterly update based on your digital records. You will then submit this directly to HMRC. These figures are provisional and can be adjusted later if needed.
- **Adhere to Deadlines:** Ensure each quarterly update is submitted by its respective deadline (e.g., 5 August, 5 November, 5 February, 5 May).

**Worked Example: Quarterly Update.** A landlord's property income and expenses for Q1 (6 April - 5 July) are:

- Gross Rent Received: £10,000
- Agent Fees: £1,200
- Repair Costs: £500
- Insurance: £200

The MTD software would summarise this as:

- **Total Income: £10,000**
- **Total Expenses: £1,900**

This summary is then submitted digitally to HMRC by 5 August.

### Step 6: Complete the End of Period Statement (EOPS)

After your fourth quarterly update, you will prepare the EOPS.

- **Make Year-End Adjustments:** This is where you account for items not typically included in quarterly summaries, such as capital allowances, adjustments for private use of property assets, accruals, prepayments, and any other accounting adjustments required to calculate your final taxable profit or loss.
- **Submit EOPS:** Your MTD software will help you compile these adjustments and submit the EOPS to HMRC by 31 January following the tax year.

### Step 7: File Your Final Declaration

The Final Declaration brings everything together.

- **Consolidate All Income:** This declaration includes the final figures from your property business (after EOPS adjustments) and any other income you receive, such as employment income (PAYE), savings interest, dividends, and other self-employment income.
- **Claim Allowances and Reliefs:** Apply any personal allowances, tax reliefs, or pension contributions.
- **Calculate Final Tax:** Your software will calculate your overall tax liability based on all declared income and reliefs.
- **Submit Final Declaration:** Submit this to HMRC via your MTD software or through your accountant by 31 January following the tax year.

## Understanding Allowable Expenses for Landlords under MTD ITSA

A key aspect of minimising your tax liability as a landlord is correctly identifying and claiming allowable expenses. MTD ITSA does not change the rules on what is an allowable expense, but it mandates digital record-keeping and accurate categorisation.

### What are Allowable Expenses?

Allowable expenses are costs incurred wholly and exclusively for the purpose of your property rental business. Deducting these expenses from your gross rental income reduces your taxable profit, and therefore your Income Tax bill.

### Common Allowable Expenses for Landlords

Here is a list of common expenses you can typically claim:

- Accountancy fees for property business.
- Advertising costs to find new tenants.
- Buildings and contents insurance premiums.
- Cleaning and gardening services.
- Council Tax and utility bills (if paid by landlord).
- Legal fees for leases, evictions, or renewals (up to one year).
- Letting agent and management fees.
- Maintenance and repair costs (not improvements).
- Mortgage interest relief (restricted to basic rate tax credit).
- Replacement of domestic items relief (like-for-like items).
- Travel expenses for property management.
- Professional memberships (e.g., National Residential Landlords Association).

### Key Considerations for Landlord Expenses

- **Repairs vs. Improvements:** Routine repairs (e.g., fixing a broken window, replacing a worn-out boiler) are allowable expenses. Improvements (e.g., adding an extension, upgrading to a higher-spec kitchen) are generally capital expenditure and are not deductible against rental income. They may be deductible against Capital Gains Tax if you sell the property.
- **Mortgage Interest Relief:** Since April 2020, landlords can no longer deduct finance costs (like mortgage interest) from their rental income to reduce their Income Tax bill. Instead, you receive a basic rate (20%) tax credit on your finance costs. Your MTD software should help you track this correctly.
- **Replacement of Domestic Items Relief:** If you replace a domestic item (like a bed, sofa, fridge, or curtains) in a furnished or unfurnished property, you can claim relief for the cost of the new item, provided it is a like-for-like replacement. This replaced the 'wear and tear allowance'.
- **Property Income Allowance (£1,000):** If your gross property income is between £1,001 and £2,500, you can choose to either deduct actual expenses or claim the £1,000 property income allowance. If your gross income is £1,000 or less, you don't need to declare it to HMRC.
- **Pre-rental Expenses:** Some expenses incurred before a property is first let can be claimed, provided they were incurred wholly and exclusively for the purpose of the rental business and within seven years of the property first being let.

Accurate digital record keeping is crucial for justifying your expense claims under MTD ITSA. AccountsOS facilitates this by allowing you to easily categorise and attach receipts to every transaction.

## Penalties for Non-Compliance with MTD ITSA

HMRC has introduced a new penalty regime for MTD ITSA, designed to encourage timely and accurate submissions. Landlords must understand these penalties to ensure full compliance and avoid unnecessary charges.

### The Points-Based Penalty System for Late Submissions

A new points-based system applies to late submissions of quarterly updates, End of Period Statements, and Final Declarations. Instead of an immediate monetary penalty for each late submission, you will accrue penalty points.

- You receive one point for each late submission.
- Once you reach a certain threshold of points, a monetary penalty is issued.
- For annual filers (like MTD ITSA landlords), the penalty threshold is **4 points**. Once you reach 4 points, you will be charged a penalty of **£200**.
- After the initial £200 penalty, an additional £200 penalty is charged for every subsequent point accrued.
- Points expire after 24 months of continuous compliance (i.e., no further late submissions).

| Scenario | Penalty |
| --- | --- |
| Late Quarterly Update | Points-based system, leading to £200 penalty for every 4 points. |
| Late End of Period Statement (EOPS) | Points-based system, as above. |
| Late Final Declaration | Points-based system, as above. |
| Late Payment of Tax | Interest charged on overdue tax, plus potential additional penalties. |
| Inaccurate Submission (Careless) | Up to 30% of the extra tax due. |
| Inaccurate Submission (Deliberate but not concealed) | 20% to 70% of the extra tax due. |
| Inaccurate Submission (Deliberate and concealed) | 30% to 100% of the extra tax due. |

### Penalties for Late Payment of Tax

MTD ITSA does not change the deadlines for tax payments, but the penalties for late payments remain.

- **Interest:** HMRC charges interest on any unpaid tax from the day after the payment was due until it is paid. The interest rate is typically the Bank of England base rate plus 2.5%.
- **First Penalty:** A penalty of 2% of the tax unpaid after 30 days.
- **Second Penalty:** An additional 2% of the tax unpaid after 6 months.
- **Daily Penalties:** Daily penalties of 5% of the tax unpaid for each day it remains unpaid beyond 12 months.

### Penalties for Inaccurate Submissions

HMRC can also issue penalties if your submissions are inaccurate and lead to an underpayment of tax. The severity of the penalty depends on the nature of the inaccuracy:

- **Careless:** If you took reasonable care but made a mistake, the penalty can be up to 30% of the extra tax due. This can be reduced to 0% if you tell HMRC about the inaccuracy unprompted and help them assess it.
- **Deliberate but not concealed:** The penalty can be between 20% and 70% of the extra tax due.
- **Deliberate and concealed:** The penalty can be between 30% and 100% of the extra tax due.

Accurate digital record keeping and regular review of your submissions are the best ways to mitigate the risk of these penalties. MTD-compatible software helps to ensure accuracy by automating many processes and providing clear summaries.

## The Role of Your Accountant and AccountsOS in MTD ITSA Compliance

Navigating MTD ITSA can seem daunting, but you don't have to do it alone. Both professional accountants and MTD-compatible software like AccountsOS play crucial roles in simplifying the process for landlords.

### How Your Accountant Can Help

An accountant can be an invaluable asset in your MTD ITSA journey, particularly if your tax affairs are complex or if you prefer to delegate compliance tasks. Their expertise can help with:

- **Eligibility Assessment:** Confirming if and when you need to comply with MTD ITSA.
- **Software Selection and Setup:** Advising on the best MTD-compatible software for your needs and assisting with its initial setup.
- **Digital Record Keeping Best Practices:** Guiding you on how to maintain accurate digital records and correctly categorise income and expenses.
- **Quarterly Submissions:** Preparing and submitting your quarterly updates to HMRC on your behalf, ensuring accuracy and timeliness.
- **EOPS and Final Declaration:** Handling the more complex year-end adjustments for the End of Period Statement and compiling your comprehensive Final Declaration.
- **Tax Planning:** Offering advice on legitimate ways to minimise your tax liability and navigate changes like mortgage interest relief.
- **HMRC Liaison:** Communicating with HMRC on your behalf regarding MTD ITSA queries or penalties.

### How AccountsOS Simplifies MTD ITSA for Landlords

AccountsOS is designed as an MTD-compatible accounting solution to streamline the entire MTD ITSA process for landlords. It automates many of the requirements, making compliance straightforward and reducing the risk of errors.

### Digital Record Keeping

Automate income and expense recording directly from bank feeds and receipts, ensuring MTD compliance.

### Automated Categorisation

AI-powered categorisation of property income and expenses, correctly identifying allowable deductions.

### Quarterly Update Generation

Easily generate and review your quarterly MTD updates, ready for submission to HMRC.

### MTD Deadlines & Reminders

Receive timely notifications for all MTD ITSA quarterly updates, EOPS, and Final Declaration deadlines.

### Accountant Collaboration

Seamlessly share your MTD-ready records with your accountant, simplifying year-end processes.

### EOPS & Final Declaration Support

Tools to help you prepare the necessary adjustments for your End of Period Statement and compile your Final Declaration.

### Seamless Accountant Collaboration

AccountsOS isn't just for DIY tax management. It facilitates seamless collaboration with your accountant. You can grant your accountant access to your AccountsOS data, allowing them to review your digital records, make any necessary adjustments, and submit your quarterly updates, EOPS, and Final Declaration directly from the platform. This ensures that both you and your accountant have a real-time, accurate view of your property finances, making year-end processes much more efficient.

By combining the power of MTD-compatible software like AccountsOS with the expertise of a professional accountant, landlords can approach MTD ITSA with confidence, ensuring compliance while minimising administrative burden.

## MTD ITSA Preparation Checklist for Landlords

To ensure you are fully prepared for Making Tax Digital for Income Tax Self Assessment, follow this essential checklist:

- **Assess Eligibility:** Calculate your total gross property and self-employment income for the 2024/25 tax year. If it exceeds £50,000, you are mandated for MTD ITSA from April 2026.
- **Research and Select MTD-Compatible Software:** Choose an HMRC-recognised software solution like AccountsOS that meets your digital record-keeping and submission needs.
- **Set Up Digital Record Keeping:** Link your property bank accounts, establish a system for categorising income and expenses, and ensure all receipts and invoices are stored digitally.
- **Register for MTD ITSA with HMRC:** Once your software and digital records are ready, sign up for MTD ITSA through your Government Gateway account and authorise your chosen software.
- **Notify Your Accountant:** If you use an accountant, inform them of your MTD ITSA registration and ensure they are authorised as your agent for MTD purposes.
- **Understand Quarterly Deadlines:** Familiarise yourself with the quarterly reporting periods and their respective submission deadlines to avoid penalties.
- **Review Allowable Expenses:** Ensure you are correctly identifying and categorising all allowable property expenses to accurately calculate your taxable profit.
- **Plan for EOPS and Final Declaration:** Understand the requirements for year-end adjustments and the consolidation of all income sources for your annual declarations.
- **Stay Informed:** Keep abreast of any further updates or guidance from HMRC regarding MTD ITSA.

By systematically working through this checklist, landlords can confidently prepare for the transition to MTD ITSA and maintain full compliance with HMRC's new digital tax requirements.

## Frequently asked questions

### What is 'qualifying income' for MTD ITSA?

For MTD ITSA, 'qualifying income' refers to your gross income from self-employment and/or property businesses. For landlords, this is your total rental income before deducting any expenses.

### Do I need separate software for each property?

No, MTD ITSA generally treats all your UK property income as a single 'property business'. Your chosen software should be able to consolidate income and expenses from all your UK properties.

### What if my income falls below the threshold after I've started MTD?

If your qualifying income consistently falls below the threshold in subsequent tax years, you may be able to opt out of MTD ITSA. You should inform HMRC if this is the case.

### Can my accountant handle MTD submissions for me?

Yes, your accountant can submit your MTD ITSA updates and declarations on your behalf, provided they use MTD-compatible software and have been authorised by you through your HMRC online account.

### What if I use cash basis accounting?

MTD ITSA supports both cash basis and traditional accruals accounting. Most small landlords use the cash basis, which means you record income and expenses when money is received or paid.

### What is bridging software?

Bridging software is a digital tool that allows you to take data from spreadsheets or non-MTD software and submit it to HMRC in an MTD-compliant format. It 'bridges' the gap for those not using full MTD software.

### Will MTD ITSA affect my ability to claim the £1,000 property income allowance?

No, the £1,000 property income allowance (or trading allowance) remains available. If your gross property income is below £1,000, you don't need to declare it. If it's above, you can choose to deduct actual expenses or the £1,000 allowance.

### What if I have jointly owned properties?

For jointly owned properties, each owner's share of the gross rental income counts towards their individual MTD ITSA qualifying income threshold. Each owner is responsible for their own MTD compliance.

## Related guides

- [Self Assessment Guide](/guides/self-assessment)
- [Allowable Expenses for Landlords](/guides/landlord-expenses)
- [All Tax Deadlines UK](/deadlines)