Making Tax Digital for landlords in Cheltenham and Gloucestershire

If you let property in Cheltenham, Gloucester or anywhere else in the county, two changes are heading your way at the same time. Making Tax Digital for Income Tax is widening, and from April 2027 rental income will be taxed at its own, higher rates. Your 2025/26 tax return, due by 31 January 2027, decides when the first one reaches you.

Are you in?

Making Tax Digital applies once your qualifying income passes the threshold. That is your gross rents plus any gross self-employment turnover, before expenses. It is not your profit, and salary, pensions and dividends do not count.

• More than £50,000: in since 6 April 2026.
• More than £30,000: in from 6 April 2027, tested on your 2025/26 return.
• More than £20,000: in from 6 April 2028.

A landlord with two flats in Cheltenham bringing in £1,400 a month between them has £16,800 of rent. Add £15,000 of turnover from a side business and the total is £31,800, which brings them in from next April even though the profit on both may be modest.

Jointly owned property

Where you own a property with a spouse or partner, each of you counts only your own share of the rent. A house let at £36,000 a year and owned 50:50 gives each owner £18,000 of qualifying income, so neither is caught at £30,000 on that property alone.

If you are in, each owner keeps their own digital records and files their own quarterly updates. There is an easement for joint owners: the quarterly updates can show just your share of the rent, with the expenses reported in full on the final return. That only applies to the jointly owned property. A property you own on your own still needs income and expenses each quarter.

What changes in practice

• Records of rents and expenses kept in software that works with Making Tax Digital, not a spreadsheet you total up in January.
• A summary sent to HMRC every quarter, by 7 August, 7 November, 7 February and 7 May.
• A final return by 31 January after the tax year ends, as now.

The quarterly updates do not change when you pay. Tax is still due on 31 January and 31 July. For the first year, HMRC will not charge penalty points for a late quarterly update, but the final return and the payments carry the usual penalties.

Property income rates from April 2027

From 6 April 2027, property income in England, Wales and Northern Ireland will be taxed at 22%, 42% and 47%, two points above the rates on earnings. Relief for mortgage interest is due to move to 22% at the same time. For a higher-rate landlord with £20,000 of rental profit and no mortgage, that is £400 more tax a year.

That makes the 2026/27 and 2027/28 years worth planning together. Timing of repairs, who owns what between spouses, and whether a portfolio still belongs in your own name are all questions to look at before April, not after.

What to do before 31 January

1. File your 2025/26 return early. It tells you both your tax bill and whether you are in Making Tax Digital from April.
2. Check your figures are gross. Reporting net rents can understate your qualifying income, and overstate it the other way if agent fees are missed.
3. Pick your software now if you are near £30,000. Starting the year with clean records is far easier than catching up in July.

We prepare rental accounts and file quarterly updates for landlords across Gloucestershire. See how we work with landlords, check the dates on our Making Tax Digital page, or book a free call.