MTD Digital Records for Landlords: What HMRC Requires in 2026/27

What counts as an MTD digital record for landlords?

A digital record is not just a scanned receipt. It is the accounting entry for a rental transaction kept in electronic form, usually inside MTD-compatible software, an app, or a spreadsheet that can connect to HMRC through compatible software.

For a landlord, the minimum useful digital record is the date, amount, category and source document for each item of rental income or expense. The source document could be a rent statement, bank transaction, invoice, receipt, mortgage interest certificate, letting-agent statement or insurance schedule.

HMRC says compatible software must let you create, store and correct digital records, send quarterly updates, and submit the tax return by the following 31 January.

• Rent received from tenants or agents should be recorded as gross rental income, not just the net amount that lands in your bank.
• Expenses should be split into the correct property categories, especially residential property finance costs such as mortgage interest.
• You do not need to upload every receipt to HMRC with your quarterly update, but you must keep evidence behind the figures.
• Paper records can still be kept as backup, but for MTD the active record must be digital.

Which landlords must keep MTD digital records in 2026/27?

MTD for Income Tax starts for individual landlords and sole traders from 6 April 2026 if they are registered for Self Assessment and their total qualifying income from property and self-employment is over £50,000.

Qualifying income is gross income before expenses. For landlords, that means gross rents and other property receipts before mortgage interest, repairs, insurance, agent fees or other deductions. If you use a letting agent, add the agent’s deducted fees back to calculate gross rent.

The thresholds then reduce in later years: over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. If you are unsure whether you are in scope, use your gross figures and check MTD qualifying income for landlords.

What rental income should be recorded digitally?

Record the full property income that belongs in your rental accounts. For most landlords this means rent, service charges you collect, insurance recharges, tenant contributions to repairs, premiums for the grant of a lease, and other property receipts.

If a letting agent deducts their fee before paying you, record two things: the gross rent as income and the agent fee as an expense. Recording only the net bank receipt understates both income and expenses, and can also give the wrong answer for MTD threshold checks.

If you own more than one UK rental property personally, your UK property income is normally one UK property business for tax reporting. You can track each property separately for management purposes, but the quarterly UK property update is based on the total UK property income and expense categories.

• Record rent on the date that fits your accounting basis.
• Keep agent statements showing gross rent, deductions and net payments.
• Separate UK property and foreign property income if you have both.
• Keep joint property records showing your share, not just the total property figure.
• Do not include tenant deposits as income when they are properly held as refundable deposits.

What expense categories do landlords need for MTD?

MTD quarterly updates use property income and expense categories that broadly follow Self Assessment property reporting. You should record each expense in the right category when it happens, rather than trying to rebuild the year from bank statements in January.

HMRC’s quarterly update direction includes separate categories for residential property finance costs. This matters because mortgage interest on residential property is not deducted in the same way as ordinary repairs or insurance when the final tax calculation is made.

Landlords with annual turnover below the VAT registration threshold of £90,000 may be able to use less detailed income and expense categorisation for MTD quarterly updates. But HMRC still requires residential property finance costs to be recorded and sent separately where they exist.

Can landlords use spreadsheets for MTD digital records?

Yes, a spreadsheet can be part of your MTD record-keeping system, but it must work with MTD-compatible software when you send information to HMRC. A standalone spreadsheet that is manually retyped into HMRC is not enough once you are within MTD.

Some landlords will use a spreadsheet plus bridging software. Others will use landlord tax software with bank feeds, receipt capture and category mapping. The right answer depends on the number of properties, whether you have an agent, whether you have joint ownership, and how confident you are with spreadsheet controls.

If you use bank feeds, review the categories. Bank feeds can save time, but they do not know whether a payment is a repair, an improvement, a finance cost or a personal cost without a rule or human check. For practical setup, see landlord accounting software bank feeds.

• Protect formulas and category lists if you use spreadsheets.
• Keep a clear audit trail from bank transaction or receipt to quarterly total.
• Back up records outside your laptop.
• Do not overwrite old entries without keeping a correction trail.
• Check that your chosen software can handle UK property income before signing up.

How quarterly updates use your digital records

Your quarterly update is a summary of income and expense totals from your digital records. It is not a full tax return and it does not require you to send HMRC copies of individual invoices or receipts.

For landlords in the first mandated group, digital record keeping starts on 6 April 2026. The first quarterly update deadline is 7 August 2026. The 2026/27 MTD tax return is then due by 31 January 2028 through compatible software.

The tax payment date is not brought forward by MTD. You still settle the Self Assessment liability by 31 January after the tax year, with payments on account still relevant where they apply.

How long should landlords keep digital records?

Digital records are not just for the quarterly update. They are the records behind your tax return and must be kept in case HMRC asks questions later.

For a property business, HMRC’s compliance guidance treats letting property as a business for record-retention purposes. For the 2026/27 tax year, the normal online filing deadline is 31 January 2028, so records should normally be kept until at least 31 January 2033.

Keep the source evidence as well as the bookkeeping entry. A digital line saying “repairs £480” is weak without an invoice, receipt, contractor email, bank statement or agent statement to support it.

• Keep rent statements and tenancy records.
• Keep repair invoices and proof of payment.
• Keep annual mortgage interest statements.
• Keep insurance, licence and service charge documents.
• Keep capital improvement records for CGT as well as income tax.

A worked example

A landlord receives rent through an agent in June 2026. The agent deducts their fee before paying the landlord. The landlord also pays mortgage interest and a repair directly.

The MTD record should not show only the £1,056 bank receipt. It should show £1,200 gross rent, £144 agent fee, £180 repair and £350 residential finance cost in the right categories.

Frequently asked questions