One of the questions I get asked most is about MTD for landlords with one property. “I’ve only got the one flat, surely this doesn’t apply to me?” The honest answer is: it might, it might not, and it depends on a couple of things people don’t always expect. So let’s work it out properly.
How HMRC decides if MTD for landlords with one property applies
Making Tax Digital for Income Tax is based on your qualifying income. That’s your gross rent, before any expenses, PLUS any self employed income you have, added together. It’s NOT your profit.
- From 6 April 2027, it applies if your qualifying income is over £30,000.
- From 6 April 2028, it applies if your qualifying income is over £20,000.
HMRC uses the figures on a specific tax return to decide (the 2025/26 return for April 2027, and the 2026/27 return for April 2028). The Low Incomes Tax Reform Group has a really clear breakdown of when MTD starts for you.
3 worked examples
To be clear, these aren’t real clients of mine, just realistic examples to show how the numbers work.
Example 1: Amy, one flat, £1,250 a month rent. That’s £15,000 a year. She has no other self employed income, so she’s under both thresholds, and MTD doesn’t apply to her yet.
Example 2: Raj, one house, £1,800 a month rent. That’s £21,600 a year. He’s under £30,000, so he’s not in from April 2027, but he IS over £20,000, so MTD applies to him from April 2028.
Example 3: Claire, one flat at £1,000 a month, plus a part time self employed business turning over £20,000. Her rent is £12,000, but added to her business income her qualifying income is £32,000. So even with just one property, she’s in from April 2027.
If your rent is in a spreadsheet, the yearly figure is one formula, totalling the rent column for the tax year (start date in F1, end date in G1):
=SUMIFS(Rent[Amount],Rent[Date],”>=”&F1,Rent[Date],”<=”&G1)
Or for a quick check, monthly rent times twelve:
=B2*12
Top Tip: remember it’s the rent you receive, BEFORE letting agent fees, repairs or mortgage interest come off. That’s where most people’s estimate goes wrong.
What if you own the property jointly?
Good news here. If you own a property with someone else, you only count your share of the rent. So a £24,000 a year property owned 50/50 counts as £12,000 each. HMRC has also introduced some simplifications for joint owners, and the Association of Taxation Technicians sets them out clearly in their guide to Making Tax Digital for joint property owners.
If you’re not in yet, should you still get ready?
I’d say yes, for two reasons. Firstly, rents go up, and a rent review can tip you over a threshold without you really noticing. Secondly, the £20,000 threshold in April 2028 will catch a lot of single property landlords, so getting your records digital now means there’s no scramble later.
It also just makes life easier. Knowing exactly what your property makes, after costs, every month, is useful whether HMRC asks for it or not.
Keeping it simple with ACE
For most single property landlords, ACE Essentials covers everything: rent and expenses recorded as you go, a monthly profit and loss report, an estimated tax liability, and your quarterly figures ready for when MTD applies. If you’d like the reassurance of reconciling back to your bank account, ACE Professional adds that. You can see how it works for a landlord with three properties in my ACE Professional walkthrough.
It’s a one off cost, no monthly subscription, and the spreadsheet is yours from day one. If you’re over £30,000, my post on Making Tax Digital from April 2027 covers what to do next.
Questions landlords ask me
Does my salary from a job count? No. Only rent and self employed income count towards the threshold.
Does a holiday let count? Yes, holiday let income counts as property income too.
I use a letting agent, do they handle MTD? Not usually. They’ll send you statements, but keeping your records and sending the updates is still your responsibility, or your accountant’s if they do it for you.
If you’re not sure whether you’re in, book a FREE Bookkeeping Demo and we’ll work it out together. And if you don’t need ACE yet, I’ll tell you that too.
