Digital Record Keeping for UK Landlords

UK landlords are firmly within the scope of Making Tax Digital (MTD) for Income Tax. If you own rental property — whether it's a single flat or a large portfolio — you need to understand how these digital rules affect your tax admin.

The Threshold for Landlords

The MTD thresholds apply to your total qualifying income. For a landlord, this is your gross rental income before any expenses (like letting agent fees or repairs) are deducted.

• If your gross rental income was more than £50,000 in the 2024/25 tax year, you must comply with MTD from 6 April 2026.
• If it was more than £30,000 in the 2025/26 tax year, you must comply from April 2027.

If you are also a sole trader, you must add your gross business turnover to your gross rental income to determine if you meet the threshold.

Section 24 and Digital Records

One of the most complex areas of property tax is the "Section 24" mortgage interest restriction. Under these rules, residential finance costs (like mortgage interest) are not deducted from your rental profit. Instead, you receive a 20% tax credit against your final income tax liability.

Digital record-keeping software can help you manage this by correctly categorising mortgage interest so it doesn't accidentally get deducted as an allowable expense, which would result in an incorrect tax calculation.

What Landlords Must Record Digitally

To comply with MTD, you need to keep digital records of:

• The date you received rent.
• The amount of rent received.
• The date and amount of each property expense (repairs, insurance, etc.).
• The category of each expense.

Preparing Your Quarterly Figures

MTD requires you to send a summary of your property income and expenses to HMRC every three months. This isn't a full tax return, but a snapshot of your records.

KiTax is designed to handle the specific needs of UK landlords, including tracking multiple properties and correctly calculating the Section 24 mortgage interest credit.

*Direct submission to HMRC is not currently available via KiTax. KiTax is a record-keeping and tax preparation tool.*

Source: GOV.UK - Income Tax for Landlords