The Intermediary – February 2026 - Flipbook - Page 58
BUY-TO-LET
Opinion
Making Tax Digital
is coming
M
aking Tax Digital
(MTD) for Income
Tax is no longer
a future change
that landlords
can safely park
for another year. From 6th April,
it becomes mandatory for a large
number of unincorporated landlords
and sole traders, and advisers should
already be thinking about how this
impacts their landlord clients.
Any individual landlord or sole
trader with qualifying income above
£50,000 will need to comply with
MTD for Income Tax from April, and
HM Revenue and Customs (HMRC)
will not enrol people automatically.
That places real importance on
awareness and preparation.
For advisers, this is not simply a
technical tax change to note and move
on from. It is another area where
landlords will need support.
misunderstanding is that MTD means
paying tax quarterly, but that is
not the case.
What MTD involves
What needs to happen
MTD for Income Tax is a new way
for individuals to report income and
expenses to HMRC. It applies to sole
traders and landlords who complete
self-assessment and whose total
income from self-employment and
property exceeds £50,000 a year. This
includes landlords who hold property
in their own name, but it does not
include limited companies at this
early stage.
From April, those within scope
will need to keep digital records using
recognised soware rather than
paper records or basic spreadsheets.
They will also need to send quarterly
updates to HMRC through that
soware. These updates are not tax
returns, and they do not trigger
tax payments. They are simply
summaries showing income and
expenses for each three-month period.
The annual tax return will still be
required, and any tax due will still
be payable by 31st January following
the end of the tax year. One common
HMRC sets out a clear process for
those who need to use MTD. The first
step is working out qualifying income,
as this determines whether the
rules apply.
The next step is confirming when
an individual needs to start using the
service. HMRC provides an online tool
to help with this. Aer that, suitable
soware must be chosen, as HMRC
does not provide its own system. There
are a wide range of options available,
and the right choice will depend on
how complex someone’s income is
and how confident they are with
digital tools.
Once prepared, individuals need
to sign up to MTD and then use the
system throughout the year. This
includes keeping records up to date,
submiing quarterly updates, and
completing the annual return through
the same soware.
Advisers are not expected to give
tax advice unless they are qualified to
do so, but they are well placed to help
56
The Intermediary | February 2026
LOUISA RITCHIE
is national account manager
at Fleet Mortgages
Impacted landlord clients
Many landlords will assume that MTD
does not apply to them, particularly
those who do not see themselves as
running a business. In reality, many
advisers will have clients who are
likely to fall within scope without
realising it.
This includes landlords with
several properties, those with a mix
of rental income and self-employed
income, and those close to the
£50,000 threshold who may cross it
as rents increase. It may also affect
joint borrowers where one party has
qualifying income in their own name.
Mortgage advisers themselves may
also be impacted if they operate as sole
traders, as perhaps will other selfemployed clients advisers work with.
landlord clients understand what is
changing and why it maers. Simply
raising MTD during a review or
remortgage discussion could prompt
action far earlier than landlords might
otherwise take.
Advisers can also add value
by signposting clients towards
appropriate solutions, whether
that is accounting support, digital
record-keeping tools or bank accounts
designed to help separate personal
and property income and link with
accounting soware.
For advisers, this fits naturally
within the wider set of added services
that landlord clients now expect.
Helping clients prepare for MTD
supports beer organisation, clearer
affordability discussions and stronger
long-term relationships. In some
cases, there may also be opportunities
to introduce clients to third-party
services where appropriate.
Why acting now
makes sense
Landlords are already dealing with
regulatory change, cost pressures
and shiing market conditions,
and MTD adds another layer to
manage. Advisers who understand
the rules now, and who start these
conversations, will be beer placed
to support clients through the change
and demonstrate value beyond the
mortgage itself.
In a market where strong adviser
relationships maer more than ever,
that proactive support can make a
real difference. ●
