From 6 April 2026, Making Tax Digital for Income Tax began for sole traders and landlords with qualifying income over £50,000. That threshold then falls to £30,000 from 6 April 2027 and £20,000 from 6 April 2028. This is not a blanket change for every landlord from day one, but it is significant enough that brokers should already be discussing it with clients.
At first glance, this may look like an issue for accountants rather than mortgage advisers. But for brokers working in the buy-to-let space, it is still highly relevant. The landlords likely to be affected first are often the same clients already managing larger portfolios, juggling multiple income streams and making strategic decisions around acquisitions, refinances and ownership structures. In other words, these are not peripheral clients – they sit at the heart of many brokers’ day-to-day business.
The first thing to understand is that Making Tax Digital for Income Tax is based on qualifying income, not profit. HMRC defines qualifying income as the total gross income an individual receives from self-employment and property in a tax year. So, a landlord cannot assume they are outside scope simply because their net profit is relatively modest after costs. If their gross income exceeds the threshold, they may still be caught. Equally, a client whose rental income alone sits below the threshold could still fall within scope if they also have self-employed income that takes them over it.
Another point to consider is that where a property is jointly owned, it is the individual’s share of the property income that counts towards their qualifying income. HMRC also makes clear that some sources of income reported through Self Assessment, such as employment income, dividends and pensions, do not count towards the threshold for Making Tax Digital for Income Tax.
For landlords within scope, HMRC says they, or an agent acting on their behalf, will need compatible software to create, store and correct digital records, submit quarterly updates and complete the year-end process. HMRC does not provide the software itself.
Some landlords will already be using digital bookkeeping systems and may be reasonably well prepared. Others will still be relying on spreadsheets, paper files or a once-a-year exchange with their accountant. For those clients, this is likely to feel like a genuine operational shift rather than a simple compliance change.
Brokers do not need to become tax advisers and, indeed, should not stray into giving tax advice. But this is still a conversation worth having because it forms part of the wider picture of how a client runs their portfolio, how prepared they are for change and what support they may need around them.
Ahead of 6 April, there are a few sensible questions brokers can start asking. Does the client know their approximate gross rental income, rather than just their profit? Do they also have self-employed income that needs to be taken into account? Are their records already held digitally? Have they spoken to their accountant or tax adviser about whether they will fall within scope and, if so, what they need to do next?
These aren’t tax recommendations. They are practical prompts that can help brokers identify where a landlord client may need further support.
There will also be clients who may assume they are exempt, and HMRC has published guidance on exemptions, including for some individuals who are digitally excluded, but brokers should be careful not to make that judgement on a client’s behalf. Where there is any uncertainty, the safest course is to signpost them to HMRC’s guidance and encourage them to speak with their accountant.
Ultimately, this may not be a lending policy issue, but it is still very much a broker issue. The advisers who raise it early, ask the right questions and signpost clients appropriately will be in a stronger position to support landlord borrowers through another meaningful change.
And in a market where clients increasingly value advisers who understand the bigger picture, that broader awareness can make a real difference.
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