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Do I need MTD if I use a letting agent?

If a letting agent looks after your rental, you get a statement showing the rent collected, their fees, and what landed in your account. Making Tax Digital (MTD) for Income Tax started in April 2026 and changes what you’re expected to do with those statements - and how often.

Making Tax Digital for landlords who use a letting agent

Having a letting agent doesn’t change whether the rules apply to you. MTD for Income Tax is based on your income as the landlord - not on who collects the rent for you. So if your agent manages the property, you’re still the person expected to keep digital records and send quarterly updates to HMRC. What decides whether it applies yet is how much you earn, and when your band was phased in.

When does it apply to me? The thresholds

It depends on your qualifying income: your combined income from self-employment and property. Note that this is turnover, not profit - it’s measured before you take off expenses, which catches people out. The phase-in runs:

• From April 2026 - qualifying income over £50,000
• From April 2027 - over £30,000
• From April 2028 - over £20,000

The quarterly update deadlines

Once you’re in, you send HMRC four short summaries of your income and expenses a year, through MTD-compatible software. For the standard quarters, the dates are:

So the first ever quarterly update covered 6 April to 5 July 2026, with a deadline of 7 August 2026. You can choose to use calendar quarters instead (1 April to 30 June, and so on), which keeps the same due dates.

A quarterly update is not a tax return. It’s a summary - you still make a final declaration after the tax year ends, and 31 January hasn’t gone away. What’s changed is that the work is now spread across the year instead of landing in one January pile.

What if I miss one?

HMRC isn’t issuing penalty points for late quarterly updates in the first year. After that it moves to a points-based system: one point per missed deadline, and a £200 charge once you reach four points.

The bit that catches landlords out

HMRC wants digital records of rental income and expenses, kept in compatible software and sent from it four times a year, rather than added up on paper and typed onto a tax return once a year.

That’s awkward when your income arrives as a PDF statement from your agent. It isn’t a digital record you can drop into software - it’s a document you’d normally read and retype. Worse, an update wants your income and your expenses as separate figures, with your mortgage interest pulled out from the other costs - and a full category breakdown on top of that if your property turnover reaches the VAT registration threshold, currently £90,000. A letting-agent statement usually shows a single net payout with the rent, the management fee, the VAT and the maintenance all folded inside it. Someone has to pull that apart, four times a year now instead of once.

What a quarterly update actually asks for

Most MTD explainers say “split it into categories” and leave it there. Here are the categories. They aren’t new ones: HMRC’s wording is that Making Tax Digital for Income Tax “uses the same income and expense categories as Self Assessment”. It’s the same split you already do once a year on the UK property pages of a tax return, asked for four times instead.

Income categories for UK property

• Total rent - the rent your tenant actually paid, gross, before your agent took anything out of it.
• Other income from property
• Premiums for the grant of a lease
• Reverse premiums and inducements

For most landlords with an agent, only the first line ever has a number in it. Watch that it’s the gross rent - the money-in half of a statement often contains things that aren’t rent at all, which is covered in the guide to allowable expenses and where to find them.

Expense categories for UK property

• Rent, rates, insurance and ground rents - including ground rent and service charges your agent pays on your behalf.
• Property repairs and maintenance - the contractor lines on your statement.
• Legal, management and other professional fees - where your agent’s commission goes, along with tenant-find fees, renewal fees and the VAT on them.
• Costs of services provided, including wages - communal cleaning, gardening, and anyone you pay to do them.
• Residential property finance costs - mortgage interest. See the warning below.
• Residential finance costs brought forward - unused finance costs carried in from an earlier year.
• Non-residential property finance costs - commercial property only, and a common mix-up with the line above.
• Travel expenses
• Other allowable property expenses

Four of those nine are fed almost entirely by your agent’s statement. The commission, its VAT, the safety certificates, the plumber, the communal cleaning - they’re all on there already, itemised, before being folded into one net payment.

You may not have to use them at all

This is the bit that gets overstated, and it’s worth knowing before anyone sells you software on the strength of it. MTD does not force every landlord to itemise every expense. Full categorisation only kicks in once turnover for that income source reaches the VAT registration threshold, currently £90,000. Below that, HMRC lets you record less detail.

There is one exception, and it’s aimed squarely at landlords. If you receive UK property income from residential property, HMRC says you must record whether each transaction is income or an expense, and “if it is an expense, record whether the expense is for a restricted finance cost” - at any turnover, however small. So the floor for a residential landlord isn’t nine categories. It’s income, expense, and one flag.

And that single mandatory flag is the one thing your agent can never tell you. A restricted finance cost is essentially your mortgage interest - the cost that gets a basic rate tax reduction instead of coming off your profits. Your agent doesn’t pay your mortgage and has no idea what it costs, so it will never appear on a statement. That figure comes from your lender’s annual interest certificate and you have to fetch it yourself. There’s more on how the restriction works in the expenses guide.

Where this leaves you

You’ve essentially got three jobs: (1) get the numbers off the agent’s statement, (2) into a tidy digital format, split by category, and (3) into your bookkeeping or MTD software to send to HMRC.

A quick, honest note on what RentSorter does - and doesn’t

RentSorter is not accounting software, is not HMRC-recognised, and does not file anything - you’ll still need proper MTD-compatible software (or an accountant) for that. What RentSorter does is the fiddly first step: it reads your letting-agent statement - even a scanned one - and turns it into a clean Excel spreadsheet with every line itemised, split into categories, and the totals checked against the statement’s own. In other words it gets your statements out of PDF-and-retyping land and into a digital file you can hand to your accountant or bring into your software.

Common questions

Before you rely on any of this for tax

Thresholds, dates and how they apply depend on your own circumstances, and the rules are still bedding in - so check the current HMRC guidance or ask your accountant. This guide explains the landscape; it isn’t tax advice.