Making Tax Digital for Income Tax: A Guide for Property Managers

The UK government’s Making Tax Digital (MTD) programme is expanding and from April 2026, it will apply to landlords with income over £50,000. That means many of your property owner clients will need to start reporting their income tax quarterly using digital software.

If you’re a property manager using Propman, this change may not apply to you directly but it will impact the landlords you manage property for. They may look to you for data, guidance, or even direct support.

Here’s everything you need to know to prepare and help your clients comply.

What Is Making Tax Digital for Income Tax?

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is a major change to how individual landlords and self-employed people report tax to HMRC.

From April 2026, those affected must:

• Keep digital records  of income and expenses
• Submit quarterly tax updates  using HMRC-recognised software
• File a final declaration annually (instead of a Self Assessment return)

HMRC calls it “the most significant change to the Self Assessment regime since 1997.”
[HMRC Press Release, 22 April 2025]

MTD ITSA follows the earlier rollout of Making Tax Digital for VAT and is part of the government’s drive to digitise tax administration.

Who Is Affected by MTD for Income Tax?

Most property management companies (and letting agents) won’t need to comply directly with MTD ITSA  unless they themselves are landlords or sole traders with qualifying income. However, your clients likely could be affected.

Here’s the rollout plan:

Not Yet Included:

• Partnerships  (until a later phase)
• Limited companies  (covered under future MTD for Corporation Tax)
• Individuals earning under £20k  (exempt for now)

What Changes in April 2026?

If your client is affected, they’ll need to:

• Keep Digital Records

Maintain income and expenses in MTD-compatible software — no more paper or manual spreadsheets.

• Submit Quarterly Updates

Every 3 months, a digital update must be submitted.

• File a Final Declaration

At year-end, a Final Declaration replaces the Self Assessment return. It includes finalised income and adjustments.

• Continue Paying Tax As Usual

There’s no change to payment deadlines 31 Jan and 31 Jul still apply.

What Role Can Property Managers Play?

Even though the tax obligations fall on landlords, you may be asked to help:

Provide Accurate Financial Data

Landlords will rely on you for up-to-date records, especially quarterly statements of rent, expenses, and charges. Using Propman, you can generate these reports with minimal effort.

Educate and Inform Your Clients

Not all landlords are aware of MTD ITSA. Proactively share what’s changing and who it affects. Send reminders or short guides in the run-up to 2026.

Offer Submission Support (If Agreed)

Some property managers may choose to become HMRC-authorised agents to submit on behalf of landlords. This adds responsibility but also value for clients seeking hands-on help. If you're not acting as the agent yourself, it's still crucial to support a smooth data handover. Property managers using Propman can easily export income and expense reports in a format that landlords or their accountants can upload to HMRC via their chosen MTD software.

Stay Compliant and Connected

By keeping your systems MTD-ready,  you can ensure your reports align with landlords' software or export data cleanly to them or their accountants.

How Propman Supports Smooth MTD Compliance

If you’re using Propman, you already have a head start:

MTD-Ready Software

Propman was recognised by HMRC for MTD VAT in 2019 and we are actively exploring how we can support MTD for Income Tax ahead of the 2026 rollout. Further details will be confirmed as work is validated and scheduled.

Integrated Accounting and Property Data

All key records such as rent receipts, expenses and contractor charges  are already logged digitally.

Fast, Reliable Reporting

Run quarterly summaries at the touch of a button to support your landlords’ HMRC submissions.

Support and Guidance from Grosvenor Systems

We’re closely following HMRC developments and engaging with property managers to understand their needs. While functionality is still under review, we plan to offer clear guidance and supporting materials well in advance of April 2026. Stay tuned for updates as we move through product validation.

As noted in Making Tax Digital – Ambition Justified?  combining property management with accounting software streamlines compliance and reduces admin.

Practical Steps: Helping Your Clients Get Ready

Here’s how you can support a smooth rollout:

1. Identify affected landlords
   Who earned over £50k from property in the last tax year?

2. Create quarterly reporting processes
   Set calendar reminders to close out and send landlord reports after each quarter.

3. Stay up to date with Propman updates
   Ensure you’re on the latest version to access future MTD features.

4. Educate clients early
   Send short summaries or links to official HMRC MTD ITSA guidance.

5. Review your role
   Will you simply provide data, or offer full tax submission services? Plan and resource accordingly.

What’s Next in 2027 and Beyond?

• 2027: MTD applies to landlords earning over £30,000
• 2028 (planned): Drops to £20,000, covering most small landlords
• Partnerships: Still to be included in a future phase
• Corporation Tax: MTD for companies likely begins 2027 or later

Final Thoughts

Making Tax Digital for Income Tax is a significant shift  especially for the landlords you manage properties for. As a property manager, you may not be directly affected, but your role in supporting client compliance will be more important than ever.

With Propman, you already have the tools to:

• Produce clean, digital records
• Generate quarterly financial summaries
• Assist clients in meeting their tax reporting requirements

Start the conversation now — April 2026 will arrive faster than you think.