Question 1

What is Making Tax Digital for rental income?

Accepted Answer

Making Tax Digital (MTD) for Income Tax requires landlords with rental income over £10,000/year to keep digital records and submit quarterly updates to HMRC from April 2026. You need MTD-compatible software (like QuickBooks, Xero, or FreeAgent) to record income and expenses digitally and submit them to HMRC. This replaces annual self-assessment for rental income (though self-assessment still required for final tax calculation).

Question 2

Do I need MTD if my rental income is under £10,000/year?

Accepted Answer

No. MTD for Income Tax only applies if your total income from property rental (gross rental income, not profit) exceeds £10,000 in a tax year. If under £10,000, you continue using normal self-assessment. The threshold is per tax year, so calculate April-April rental income to check eligibility.

Question 3

Does Locastica file my taxes or submit MTD updates?

Accepted Answer

No. Locastica provides informational readiness outputs only. We do NOT file taxes, submit MTD updates, or provide tax advice. We help you understand what MTD requires and organize your data, but you still need an accountant or MTD-compatible software to actually file. Think of Locastica as preparation, not filing.

Question 4

What software do I need for MTD?

Accepted Answer

HMRC-approved MTD software like QuickBooks, Xero, FreeAgent, or specialist landlord software (Landlord Vision, etc.). The software must be on HMRC's approved list and able to submit quarterly updates directly to HMRC. Locastica includes a software comparison section with recommendations based on your portfolio.

Question 5

When does MTD for rental income start?

Accepted Answer

April 2026 for landlords with income over £10,000/year. HMRC will phase enforcement, starting with higher earners. If you meet the threshold, you need MTD-compatible software and digital records from the start of the 2026/27 tax year. Locastica helps you prepare records before the deadline.

Making Tax Digital readiness

What it is for

Included

Key details

Need this report?

Making Tax Digital readiness

What it is for

Included

Key details

Need this report?