MTD final declaration vs tax return: what landlords still file in 2026/27

MTD final declaration vs tax return: the short comparison

For 2026/27, landlords should treat “Final Declaration” as an older or shorthand label for the final end-of-year tax return step under MTD for Income Tax. HMRC’s current operational guidance says MTD users must use their software to complete and submit their tax return.

That annual tax return is still part of Self Assessment. It pulls together your property figures, any self-employment figures, other income and gains, claims, reliefs and final declarations that the figures are complete and correct.

Has Self Assessment disappeared under MTD?

No. Self Assessment remains the tax system that calculates and collects your Income Tax. MTD changes how certain landlords keep records and send information to HMRC.

If you are required to use MTD for Income Tax, you must keep digital records, send quarterly updates, then submit your annual Self Assessment tax return using MTD-compatible software. If you are not in MTD, your tax return process does not change just because MTD exists.

LITRG also makes the same practical point for landlords: MTD changes reporting and record keeping, but the underlying tax rules for calculating rental profits are not changing.

• MTD is a reporting and record-keeping regime.
• Self Assessment is still the annual tax framework.
• Quarterly updates are not tax returns.
• The annual MTD tax return is still due by 31 January after the tax year.
• Your 2025/26 tax return is still filed the usual way by 31 January 2027 if that year is before your MTD start.

Who has to use MTD for Income Tax in 2026/27?

For the first mandatory MTD year, you are in scope from 6 April 2026 if you are an individual landlord or sole trader registered for Self Assessment, you receive property income or self-employment income, and your qualifying income on the relevant return is more than £50,000.

Qualifying income means gross income before expenses. For landlords, that means gross rent before deducting mortgage interest, repairs, letting agent fees, insurance or other allowable costs. If you have both rental income and sole trader income, you combine the gross amounts.

The rollout is phased. The threshold is more than £50,000 for the 2024/25 tax return, more than £30,000 for the 2025/26 tax return, and more than £20,000 for the 2026/27 tax return. Those phases bring affected taxpayers into MTD from 6 April 2026, 6 April 2027 and 6 April 2028 respectively.

What quarterly updates are, and what they are not

Quarterly updates are summaries of income and expenses sent from your digital records. HMRC says they are not tax returns, and you do not need to make tax or accounting adjustments before sending them.

For landlords, this is where many mistakes start. A quarterly update does not finalise your mortgage interest relief, capital allowances position, private-use adjustments or other end-of-year claims. It tells HMRC the category totals from your records so far.

HMRC will not receive every individual receipt or invoice in the quarterly update. Your software sends totals by income and expense category, using categories aligned with Self Assessment. For a deeper landlord-focused explanation, see MTD quarterly updates for landlords.

• You send updates every 3 months for each relevant property or self-employment business.
• The 2026/27 quarterly deadlines are 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027.
• You still send an update if there was no income or expense activity in the period.
• You must send the quarterly updates before you can submit the annual MTD tax return.
• The estimate after a quarterly update is not the final tax bill.

What the annual MTD tax return includes

The annual MTD tax return is the point where the year is finalised. Your software starts with the income and expense information built up through your quarterly updates, but you still need to check, adjust and complete the wider Self Assessment position.

For landlords, this is where you make the return accurate enough to file. That may include correcting rental income, adding missed expenses, separating repairs from improvements, applying finance cost rules, adding other income and checking any HMRC-held information.

If you previously thought in terms of SA105 property pages, the concept is similar: you are still reporting UK property income and expenses. The route changes from traditional online filing to MTD-compatible software if you are within MTD.

2026/27 MTD deadlines and penalty position

For landlords in the first MTD cohort, the first digital record-keeping year starts on 6 April 2026. The first MTD quarterly update is due on 7 August 2026, and the first annual MTD tax return for 2026/27 is due by 31 January 2028.

There is an important first-year easement: HMRC will not apply penalty points for late quarterly updates in the 2026/27 tax year. That does not mean you can ignore them. HMRC says you still need to keep digital records and send quarterly updates before you can submit your tax return.

The annual tax return deadline is still serious. Under the MTD penalty rules, late submission penalties are points based, and the threshold is 4 points. Once the threshold is reached, the penalty is £200, with another £200 for each further missed submission deadline.

A worked example

A landlord filed a 2024/25 Self Assessment tax return showing the following UK rental figures. They have no self-employment income.

Because the MTD test uses gross rental income before expenses, this landlord is over the £50,000 threshold even though the profit is £38,000. They must keep digital records from 6 April 2026, send four quarterly updates, then submit the 2026/27 tax return through MTD-compatible software by 31 January 2028.

Frequently asked questions