MTD for Landlords and Unincorporated Businesses in 2026

There are now fewer than 18 months until Making Tax Digital (MTD) is rolled out to landlords and sole traders earning above £50,000 per year.

MTD for ITSA was originally planned for April 2024, but the then Conservative government pushed it back to April 2026.

What is Making Tax Digital?

Making Tax Digital (MTD) aims to minimise the tax gap by mandating that businesses and individuals maintain digital records, utilise software compatible with MTD, and provide quarterly updates. This initiative seeks to modernise the tax system and bring it closer to real-time operations.  

The government envisions MTD as a tool to simplify tax compliance for individuals and businesses while promoting efficiency by encouraging the digitalisation of essential processes. Additionally, it is expected to cut down on the tax revenue lost due to preventable errors.

MTD for ITSA thresholds

MTD for ITSA will be rolled out in two stages. 

First, for landlords and sole traders earning £50,000 or more per year in April 2026, and then for those earning more than £30,000 in April 2027.

Should you sign up for MTD early?

Although sole traders and landlords have until April 2026 to sign up for MTD (April 2027 if you earn less than £50,000 per year), if you’re eligible you can sign up at any point before that. Note that certain individuals, such as people who have high income Child Benefit charges, partners in a partnership, religious ministers and foster carers cannot sign up yet.

The question of whether you not you should sign up early depends on whether or not you already have MTD ITSA-compatible software and are fully up-to-date with your taxes. Currently, these are the only accounting software packages that are compatible:

• 123 Sheets
• Intuit QuickBooks Online 
• Sage Accounting
• Dext
• APARI
• Xero MTD for IT
• Digita Personal Tax — Thomson Reuters
• FreeAgent
• SE_reports
• Hammock for Landlords
• self assessment direct

How Warr & Co can help you to stay compliant

Each year, countless taxpayers face penalties from HMRC due to straightforward errors in their self-assessment tax returns. Major changes, such as the introduction of the MTD scheme, only increase the chances of these mistakes happening.  

By working with a specialist accountant like Warr & Co, you can save valuable time, avoid the risks of overpaying or underpaying tax, and stay informed about new regulations and procedures.  

If you’re a sole trader, landlord or small business owner, our team of experts is here to help. Get in touch with us today to learn more, or request your free, no-obligation consultation to understand how we can help with multiple aspects of your business accounting.