The government has asserted that its Making Tax Digital (MTD) initiative assists landlords in managing their tax responsibilities. Exchequer Secretary to the Treasury, Dan Tomlinson, stated in a Parliamentary written answer that MTD functions effectively for businesses "of all types and sizes."
Making Tax Digital for Income Tax became mandatory in April 2026 for landlords and sole traders whose qualifying income exceeds £50,000. The government claims MTD helps reduce errors and simplifies annual tax returns by placing small businesses on a more digital footing.
The income threshold for MTD is set to fall to more than £30,000 from April 2027, which will bring additional landlords, property owners, and self-employed individuals into the system. HMRC has reported that over 570,000 customers have joined the service, with more than 436,000 having submitted their initial quarterly update.
HMRC is also beginning to automatically register individuals it believes should already be using MTD for Income Tax, with this process starting in stages this month.