"Failing to file a return on time results in a £100 fine straight away. If the return is still outstanding after three months, daily £10 penalties start to add up, reaching up to £900"
- Robert Jones - Swift Tax Refunds
Landlords earning over £50,000 will need to submit their first quarterly tax updates in exactly one year, as part of HMRC’s incoming Making Tax Digital (MTD) rules.
From April 2026, quarterly digital tax reporting will become mandatory for landlords with property income above the threshold. The first deadline, covering the period from 6 April to 5 July, falls on 7 August 2026.
A recent survey conducted by Accountex revealed widespread concern across the accounting profession. Four in five accountants identified MTD as the biggest challenge facing clients in the coming year, while one in three admitted they feel unprepared. Of those, one in ten said they feel ‘very unprepared’.
“‘From April 2026, landlords earning over £50,000 will need to start submitting quarterly updates to HMRC under Making Tax Digital,’” said Robert Jones, accountant and owner of Swift Tax Refunds. “The first of those deadlines, covering income and expenses from 6 April to 5 July, falls on 7 August. Missing it could trigger serious financial consequences.”
Jones warns that failure to meet these obligations could result in a cascade of penalties.
“Failing to file a return on time results in a £100 fine straight away. If the return is still outstanding after three months, daily £10 penalties start to add up, reaching up to £900,” he explained. "After six months, HMRC can charge a further £300 or 5% of the tax owed, whichever is higher. That same penalty applies again at the 12-month mark. In cases of deliberate delay, the fines can be even steeper.”
While submitting returns on time is essential, timely payment is equally important.
“‘Even if you submit your returns on time, not paying your tax can still lead to penalties. You’ll be charged 5% of the unpaid tax after one month, another 5% after six months, and a further 5% if it’s still unpaid at 12 months. On top of that, interest continues to build from the moment your payment is late.’”
The shift from annual to quarterly tax updates is expected to be a major adjustment for many landlords and sole traders.
“For those used to doing everything in January, this marks a big change. You’ll now have to report every few months, and if you’re not using the right software or keeping digital records, you risk falling behind. The last-minute rush just won’t work anymore.”
Despite the clear timeline, many individuals remain unprepared.
“Digital tax reporting might still feel like a future concern, but many sole traders and landlords are far from ready. Even if you’re not due to join the scheme until 2027, now is the best time to get ahead while there’s still room to learn without financial pressure.”
Jones added that the core challenge is behavioural rather than technical.
“To avoid penalties, people will need to shift their habits, from annual admin to regular digital updates. If you earn from both property and self-employment, you’ll need to keep separate records and file two sets of reports. It’s a step up in organisation, but not an impossible one.”
He emphasised the benefits of early adoption and preparation.
“‘Logging your income and expenses as you go instead of saving it all for later could help you avoid hundreds of pounds in fines once the rules kick in. Treat this coming year as a test run to avoid costly mistakes later.”
