Making Tax Digital is here: what the April 2026 change means for overseas landlords

Short answer: Since 6 April 2026, landlords with more than £50,000 of gross UK property and self-employment income must keep digital records and send HMRC quarterly updates under Making Tax Digital. It applies by income, not residency, but HMRC exempts two groups that matter from abroad: anyone without a UK National Insurance number before the tax year starts, and, for the 2026 to 2027 tax year only, anyone whose 2024 to 2025 return included the SA109 residence page. The threshold falls to £30,000 in April 2027.

This is the biggest change to how landlords report tax since Self-Assessment began — and for a non-resident owner it lands on top of the NRL scheme, not instead of it. Here is what changed, who is caught, and what to do about it from abroad.

What is Making Tax Digital for Income Tax?

Making Tax Digital (MTD) for Income Tax replaces the single annual Self-Assessment return with digital record-keeping and four quarterly updates a year, sent to HMRC through recognised software, plus a final declaration. It has applied to VAT for several years; from 6 April 2026 it reached income tax for sole traders and landlords (gov.uk guidance; The Income Tax (Digital Requirements) Regulations 2021, SI 2021/1076).

Does MTD apply to me if I live outside the UK?

Yes, if your income is in scope, unless you have no UK National Insurance number before the tax year starts, or (for the 2026 to 2027 tax year only) your 2024 to 2025 return included the SA109 residence page. Both exemptions are set out below. The test is your gross qualifying income — UK property income plus any self-employment income — not where you live. The phase-in runs:

Two details matter for overseas owners. First, the figure is qualifying income before expenses — a two-flat London portfolio at our average of roughly £2,492 pcm per home (as at June 2026 — live figure at /stats.json) grosses close to £60,000 a year, which is over the line. Second, HMRC's own guidance sets out two exemptions that reach many owners abroad (Find out if you can get an exemption from Making Tax Digital for Income Tax, GOV.UK, updated 28 May 2026):

• No UK National Insurance number. If you do not have one before the tax year starts, you are automatically exempt for that year and cannot sign up. There is nothing to apply for. If you are given a number later, MTD can apply from the following tax year.
• The SA109 residence page. If your 2024 to 2025 return included the SA109 supplementary page, you do not need to use MTD for the 2026 to 2027 tax year. From 6 April 2027 you do, if your qualifying income for 2025 to 2026 was above £30,000. If your 2024 to 2025 return had no SA109 but you reasonably expect to include one for 2025 to 2026 or 2026 to 2027, the exemption is not automatic: you apply to HMRC for it.

Neither exemption touches Self Assessment: an exempt landlord still files the annual return. Confirm with your accountant which, if either, applies to you before relying on it.

Does MTD replace the Non-Resident Landlord scheme?

No. The NRL scheme carries on unchanged: unless HMRC has approved your NRL1 application to receive rent gross, your letting agent must still withhold basic-rate tax from rent and account for it quarterly. MTD changes how you report; NRL governs how tax is collected at source. A non-resident owner in MTD will typically run both — NRL1 approval to be paid gross, then digital quarterly updates of the same income. Our overseas landlords page explains the NRL mechanics, and our post on the NRL scheme covers the forms.

What do the quarterly updates actually involve?

Each quarter you (or your agent's software) send HMRC a summary of rental income and expenses for the period. This is where a managed landlord has a quiet advantage: a firm that reconciles rent monthly already holds the transaction record the software needs. We reconcile roughly £291,560 of rent a month across the portfolio (as at June 2026), through LettsPay's FCA-safeguarded client account — so the numbers an MTD update needs already exist, itemised, before any software asks for them.

What should I do now?

1. Work out your gross UK property income for the current year. Over £50,000 — unless one of the exemptions above applies, you should already be in MTD. £30,000–£50,000 — your start date is April 2027; use this year to get the records digital.
2. Choose MTD-recognised software, or confirm your accountant files through one.
3. If you are non-resident, check the two exemptions above, then take advice on your start date. The residence rules interact with the thresholds in ways a paragraph cannot cover.

We won't pretend to be your tax adviser — we are your letting agent, and tax advice from a letting agent is worth what it costs. For MTD registration, the SA109 interaction and UK–China double-tax relief, we introduce clients to YWC London LLP (Chartered Certified Accountants; Susan Ren ACCA; Mandarin and Cantonese spoken). We take no referral fee, so the advice you get is theirs, not ours.

The bottom line for an overseas owner

MTD is administrative, not a new tax — but the penalties for ignoring it are real, and the fix is boring: digital records, quarterly rhythm, an accountant who files through recognised software. If your London flat is managed and reconciled properly, most of the work is already done.

Speak to the China Desk about how we run NRL, monthly statements and the YWC introduction for owners letting from abroad — Hanna Yu, WeChat HarveyWJames.

Sources

• Use Making Tax Digital for Income Tax — gov.uk
• Check if you need to use Making Tax Digital for Income Tax — gov.uk
• Find out if you can get an exemption from Making Tax Digital for Income Tax — gov.uk (updated 28 May 2026)
• The Income Tax (Digital Requirements) Regulations 2021 (SI 2021/1076)
• Making Tax Digital for landlords — NRLA
• HWJ live portfolio metrics: /stats.json (as at June 2026)

General information, not tax advice. Your position depends on your circumstances — take regulated advice.

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