MTD for Landlords - HMRC Counts Your Rent, Not Your Profit

Making Tax Digital tests your gross rent, not your profit. A lot of landlords look at what is left at the end of the year and assume they are well under the line.

• Qualifying income is rent before expenses. Mortgage interest, agent fees and repairs do not come off it.

• Property and self-employment are added together. A modest portfolio plus a bit of trade can cross the line.

• £30,000 applies from 6 April 2027, tested on 2025-26. That tax year has already ended.

HMRC counts the rent, not what is left

Qualifying income is your total income from self-employment and property, before expenses. Turnover, in other words.

So mortgage interest does not come off it. Neither do agent fees, insurance, service charges, or the boiler you replaced in February. Wages, dividends and pensions sit outside the test altogether.

Two things get added in. Self-employment income counts alongside property. And where a property is jointly owned, your share of the rent counts towards your own figure.

What this means for you: The test uses the number at the top of your rental accounts, not the one at the bottom.

The year that decides it has already finished

The threshold drops to £30,000 from 6 April 2027, tested against your qualifying income for 2025-26. That year closed on 5 April 2026, so the income deciding it is already banked. The return is not due until 31 January 2027, but the answer is settled.

Tom lets three flats at £1,050 a month, so £37,800 across the year. After mortgage interest, the agent, insurance and a new boiler he clears around £8,400.

Tom thinks of himself as a landlord making eight thousand a year. HMRC sees £37,800.

What this means for you: If that resembles your position you are in from next April, and three flats at ordinary rents is enough to do it.

Where we come in

We will run your qualifying income against your 2025-26 figures and tell you plainly whether next April applies. If it does not, you hear that just as plainly.

If it does, it means quarterly updates in place of the single annual return, so software and records want moving across before April rather than in the first week of the new tax year.

General information, not advice. Thresholds and start dates were checked against HMRC guidance at publication. Exemptions exist, and the timetable for partnerships is not yet set. Call us on 01793 677 644.