Making Tax Digital for Portfolio Landlords

A plain-English guide for landlords with 5 to 10 homes · Lordease · 4 November 2026

Why this guide

If you own five or more rented homes on your own, you are very likely already inside Making Tax Digital, or you will be from April 2027. Five homes at £900 a month is £54,000 of rent a year, before a single cost. That is over the first line.

Many landlords think the line is about profit. It is not. It is about rent coming in, before mortgage interest, repairs or agent fees. That one misunderstanding is why some landlords who file on time every year are now getting letters from HMRC.

This guide explains, in plain English, whether you are in, what changes, how to keep your records so the quarterly updates take minutes, and the mistakes to avoid. It is written for landlords with 5 to 10 homes who manage it alongside everything else.

Am I in? The 2-minute check

You are in when your qualifying income is over the line. Qualifying income is your gross rent from UK and overseas property plus any self-employed turnover, before any expenses. Wages, pensions, dividends and partnership income do not count. HMRC looks at the tax return from two years earlier to decide.

You must start	If your qualifying income was over	In the tax year
6 April 2026	£50,000	2024 to 2025
6 April 2027	£30,000	2025 to 2026
6 April 2028	£20,000	2026 to 2027

Own homes jointly? Only your share counts. £80,000 of rent split 50/50 is £40,000 each, so both of you start in April 2027. Split 70/30, one of you is already in from April 2026 and the other joins in 2027.

Live abroad? Non-UK residents who filed the non-residence pages (SA109) were given a one-year deferral, so they start from April 2027 at the earliest.

Worked examples

Landlord	Homes	Gross rent a year	Starts
Sole owner, average £950 a month	5	£57,000	Already in (April 2026)
Sole owner, average £750 a month	4	£36,000	April 2027
Couple, 50/50, average £1,100 a month	7	£92,400 (£46,200 each)	April 2027, both
Sole owner with a £15,000 side business	3	£30,000 (+£15,000)	April 2026 if 2024–25 was over £50,000, else 2027

Close to a line, or had a one-off year? Use HMRC's checker (link in Sources) or ask your accountant before April, not after the first letter arrives.

What actually changes

Three things change. Your tax bill does not: the rules on what is taxable and what you can claim stay the same.

Digital records. Every rent receipt and every cost is recorded in software (or a spreadsheet linked to software) as it happens, not in a shoebox at year end.
Four quarterly updates. A short summary of income and costs for each quarter, sent through HMRC-recognised software. It is not a tax return and does not mean paying tax four times a year.
One final declaration. You confirm the year's figures and claim reliefs by 31 January, as now.

Quarter (standard periods)	Update due
6 April to 5 July	7 August
6 July to 5 October	7 November
6 October to 5 January	7 February
6 January to 5 April	7 May
Final declaration for the year	31 January

You can choose calendar quarters instead (1 April to 30 June and so on); the due dates stay the same.

Penalties. In your first year there are no penalty points for late quarterly updates. From year two, each missed update earns one point; at four points you get a £200 fine, and points expire after a run of good behaviour. Late returns and late payment are penalised as before.

Good news. After each update you see an estimate of your tax bill, so January holds fewer surprises.

Sort your costs the way HMRC does

The fastest quarterly update is one where every cost already sits in the right box. These are the property expense categories HMRC uses. File each receipt into one of them the day you pay it.

HMRC category	Typical landlord costs	Watch out for
Rent, rates, insurance and ground rent	Landlord insurance, ground rent, service charge, council tax in void periods	Council tax is the tenant's while they live there
Repairs and maintenance	Boiler repair, redecorating, replacing a broken window	Improvements (an extension, a new kitchen that is better than the old) are capital, not repairs
Finance costs	Mortgage interest, loan arrangement fees	Not a normal expense: see Section 24 below
Legal, management and professional fees	Agent fees, gas safety and EICR checks, inventory, accountant, tenant referencing	Legal fees for buying a property are capital
Costs of services	Utilities, cleaning, gardening you pay for	Only what you pay, not what the tenant pays
Travel costs	Mileage to inspect or meet a contractor	Keep a dated log with the reason
Other allowable expenses	Phone, stationery, software, replacing a sofa or fridge like for like	Keep the receipt with the property

Section 24: keep mortgage interest separate

For homes owned in your own name, mortgage interest is not deducted from rent. You get a tax credit worth 20% of it instead. This is why higher-rate landlords feel they pay tax on "phantom income". Record interest on its own line, never inside "other costs", or your quarterly estimates will be too low and your final figure will be wrong.

Joint owners

Record income by quarter for your share of each home. HMRC lets joint owners record joint-property costs once a year if that is easier, but your accountant will thank you for keeping them quarterly too. Agree the split in writing and keep it with your records.

Your 90-day plan

Days 1 to 30: know where you stand

Add up gross rent for 2024–25 and 2025–26 (your share only, if joint)
Run HMRC's checker and note your start date
Ask your accountant whether they will file your updates or you will
List every home, its owners and the ownership split

Days 31 to 60: set up your records

Pick HMRC-recognised software (or check your accountant's)
Use one bank account for rent and property costs, if you can
Set up the expense categories above, with mortgage interest on its own line
Snap and file every receipt from this quarter, by property

Days 61 to 90: practise before it counts

Run a test quarter: total income and costs per category
Sign up for Making Tax Digital on GOV.UK (or let your agent do it)
Put the four update dates in your diary: 7 August, 7 November, 7 February, 7 May
Set a monthly 20-minute "paper day" to clear receipts

The one-page checklist

Ready?	Item
☐	I know my qualifying income and start date
☐	My software is on HMRC's recognised list
☐	Every receipt is filed by property and category
☐	Mortgage interest is recorded separately
☐	Joint ownership splits are agreed in writing
☐	The four update dates are in my diary
☐	I know who files: me or my accountant

Seven mistakes landlords make

Testing profit, not rent. The line is gross rent. A landlord with £60,000 of rent and £55,000 of costs is still in.
Forgetting the other owner. Each joint owner has their own start date, which can differ.
Hiding mortgage interest in costs. It is a 20% credit, not a deduction. Mix it in and every estimate is wrong.
Calling improvements repairs. A better kitchen is capital. Repairs restore what was there.
Leaving receipts to January. Quarterly updates are only quick if receipts are filed as you go.
Assuming the accountant has it. Ask who signs you up and who sends each update. Write it down.
Ignoring HMRC letters. If you think you were wrongly included, reply. Exemptions exist, but some must be applied for.

Try Lordease free

Every new rule built into your legal checklist, reminders before anything runs out, and rent, bills and documents organised for every home. Free for the first 100 landlords during the beta. Set up in about 10 minutes.

Start free

How Lordease helps

Lordease already keeps the records this guide asks for: every rent payment logged against the right home, every bill and one-off cost saved with its receipt, sorted into HMRC's property categories, with your ownership share on each home.

Coming soon: an income and expense ledger, ready for Making Tax Digital. Join the waitlist and be first in. The first 100 landlords use Lordease free during the beta. Set up takes about 10 minutes.

lordease.com · [email protected]

General information, not tax advice. Rules and dates can change; check GOV.UK or speak to an accountant before acting. Figures checked on 4 November 2026.

Sources

Find out if and when you need to use Making Tax Digital for Income Tax (GOV.UK)
Deadline approaches for first Making Tax Digital quarterly update (HMRC, quarterly dates and penalties)
Making Tax Digital and joint ownership (NRLA)
Making Tax Digital deferral to 2027 for non-UK residents (Sovereign Group)