Making Tax Digital for landlords with a letting agent

From 6 April 2027, Making Tax Digital for Income Tax reaches landlords and sole traders with qualifying income over £30,000. Instead of one tax return a year, you keep digital records, send HMRC an update every quarter using software that works with Making Tax Digital, and file a final declaration after the year ends.

If a letting agent collects your rent, three things work differently from what most landlords expect.

1. The threshold counts rent before your agent's fees

Qualifying income is your gross income from property and self-employment, before any costs. For a managed let, that means the full rent your tenant pays, not what reaches your account after the agent's fees, repairs and mortgage interest.

A flat let at £2,600 a month brings in £31,200 a year. That's over the threshold, even if your agent pays you about £25,000 after a 20% fee.

If you own the property jointly, only your share of the rent counts. And it's your 2025–26 tax return, due by 31 January 2027, that decides whether you're in from April.

2. Your agent's statement becomes your record

Most managed landlords never see individual rent payments, only a monthly statement. That statement is the raw material for your quarterly updates, so it needs to arrive on time and in a form your software or accountant can use. Retyping a PDF every quarter gets old quickly.

Worth asking your agent now:

• Can you send statements as a spreadsheet or CSV, not just a PDF?
• Do your statements show gross rent, fees and each expense separately?
• Will statements arrive in time for the quarterly deadlines?

Your agent usually won't send the updates to HMRC for you. That's your job, or your accountant's.

3. Switching agent mid-quarter splits your records

Quarters run from 6 April to 5 July, 6 July to 5 October, 6 October to 5 January, and 6 January to 5 April. Updates are due by 7 August, 7 November, 7 February and 7 May. Late updates earn penalty points, and enough points lead to a fine. When you pay doesn't change: tax is still due by 31 January, with payments on account where they apply.

If you change agent partway through a quarter, that quarter's figures come from two statements: your old agent's last and your new agent's first. Rent the old agent forwards after the switch can easily be counted twice, or not at all.

Two ways to keep it clean:

• End the old contract at a quarter end. If the dates work, hand over on 5 July, 5 October, 5 January or 5 April, so each quarter sits with one agent.
• Ask for a final statement split by quarter. Make the old agent's final statement run to the handover date and show each quarter's figures separately. It's on our handover checklist.

What to do before April 2027

1. Add up your gross rent for 2025–26, before fees and costs.
2. If it's over £30,000, choose software that works with Making Tax Digital, or talk to your accountant.
3. Ask your agent for statements you can import.
4. If you plan to switch agent, read our 12-week switching plan and aim the handover at a quarter end.

The threshold falls to £20,000 from April 2028, based on your 2026–27 income. On its own, a property let at about £1,670 a month or more would cross it.

This guide is general information, not tax advice. Check your own position with HMRC or an accountant.