MTD – Rental Income and Expenses to report quarterly from 6 April 2026. Many small portfolio landlords will have to report their rental income under Making Tax Digital for Income Tax (MTD ITSA).

If your gross “qualifying income” from UK property and any self‑employment is at least £50,000 a year, you will be within the new rules. Qualifying income is your gross takings before expenses – it includes all UK rental income (and any foreign property income if you are UK‑resident) plus any sole‑trader income, but not salary, pensions or dividends.

Each quarter you will send HMRC a short online update, using approved software, showing your UK property income and expenses under standard headings. These quarterly updates are not your final tax return, but they do need to be accurate summaries of your figures for the period

Income you must report each quarter

This is usually your main income line and includes:

• Rent due from tenants under tenancy agreements.
• Licence fees for occupation (for example, rooms in HMOs).
• Guaranteed rent paid to you by a rent‑to‑rent company.

You report the gross rent due for the quarter, before deducting agents’ fees or other costs.

If there is any other income, such as, service charges you invoice your tenants, then you need to consider each item to determine where it is disclosed. In this example, it will usually be allocated to other income form property

Expenses you must report each quarter

Rent, rates, insurance and ground rents

Include here:

• Rent you pay (for example, if you sub‑let a property).
• Business rates and other non‑domestic rates.
• Buildings and contents insurance.
• Ground rents and service charges you pay to a freeholder or management company.

These are the costs of holding or occupying the property.

Property repairs and maintenance

This heading is for day‑to‑day repairs and upkeep, for example:

• Fixing roofs, gutters, windows and doors.
• Repainting and redecorating between tenancies.
• Repairing boilers, plumbing, wiring and appliances.
• Replacing single items on a like‑for‑like basis (for example, a broken oven).

Capital improvements (extensions, loft conversions, major upgrades) are dealt with separately and not as routine revenue expenses.

Residential property finance costs

For residential lets, mortgage interest and similar finance costs are no longer deducted as an expense in the usual way – instead they give a basic rate tax reduction at the end of the year.

Under MTD you still need to record them under a separate heading:

• Mortgage interest on buy‑to‑let properties.
• Interest on loans used to buy, improve or repair residential lets.
• Certain related fees and finance charges.

Your software will use these figures at year end when working out your tax reduction.

Legal, management and professional fees

This covers the routine costs of running your property business, for example:

• Letting and management agents’ fees.
• Legal fees for tenancy agreements or renewing short leases (where allowable as revenue).
• Accountancy fees relating to your rental business.
• Professional advice on rent reviews or day‑to‑day property issues.

Legal costs that are clearly capital (for example, on the original purchase of a property) do not go here as revenue expenses.

Costs of services provided, including wages

Use this heading for the costs of services you provide to tenants, including:

• Wages for cleaners, gardeners, caretakers or on‑site staff.
• Cleaning and maintenance of common areas.
• Utilities you pay and do not recharge separately (for example, communal electricity in an HMO).

If you recharge these costs to tenants, the recharge is income (often under “other income from property”), and the underlying costs go here.

Travel expenses

This is for business travel connected with your lets, such as:

• Visiting properties to inspect them or deal with issues.
• Travelling to meet tenants, agents or contractors.

The usual rules on allowable travel apply – for example, private journeys and ordinary commuting are not deductible. 6

Other allowable property expenses

This is a “catch‑all” category for smaller items that do not fit elsewhere, such as:

• Stationery, printing and postage.
• Advertising for new tenants.
• Telephone and broadband costs related to the rental business.
• Bank charges on your rental bank account.

Try not to put large or recurring items here if they clearly belong under another heading.

Consolidated expenses

In some cases you may be able to use a “consolidated expenses” heading to group together small, mixed or infrequent costs instead of splitting everything out.

This can be useful for small portfolio landlords with relatively simple records, but you should still keep enough detail in your digital records to explain what has been included if HMRC ever asks.

How we can help

MTD is a big change, but you don’t have to navigate it alone. If you’d like support with setting up software, managing your records, or handling submissions to HMRC, we’d be delighted to help.

Feel free to get in touch for a friendly, no-obligation chat about how to get ready for MTD.

Further Reading:

MTD Quarterly Returns