How to Prepare Your Property Business for Making Tax Digital

Last updated: March 2026

Making Tax Digital is rolling out now — and the property managers who prepare early will have a smooth transition. Those who wait until the deadline will scramble. This guide gives you a practical, step-by-step plan to get your property business MTD-ready.

Assess Where You Are Now

Before you can prepare, you need to know what you’re working with.

Step 1: Calculate Your Gross Property Income

Add up all rental income before expenses:

• Airbnb earnings (gross, not payout)
• Booking.com earnings (gross)
• VRBO and other platforms (gross)
• Long-term rent received
• Any other property income

Why gross? MTD thresholds are based on gross income, not profit. Many property managers are closer to the threshold than they think.

Step 2: Check the MTD Timeline

Step 3: Audit Your Current Systems

Answer these questions:

• How do you currently record income? (Paper, spreadsheet, software?)
• How do you track expenses? (Receipts in a drawer, spreadsheet, app?)
• Do you track per property or in one pot?
• How many platforms do you receive income from?
• Do you manage properties for other landlords?

The gaps in your answers show what needs to change.

Choose Your MTD Software

What You Need

At minimum, your software must:

• ✅ Be MTD-compatible for Income Tax
• ✅ Keep digital records of income and expenses
• ✅ Submit quarterly updates directly to HMRC
• ✅ Track per property

What Property Managers Specifically Need

• Multi-property support (5, 10, 50+ properties)
• Expense categorisation per property
• Ownership tracking (for joint or managed properties)
• Reporting per property and per owner

What STR Property Managers Need on Top

• Platform data import (Airbnb, Booking.com, VRBO)
• Gross income calculation (before platform fees)
• Multi-platform consolidation
• Currency conversion

Recommended Software

For short-term rental property managers: HMRC Reporter — imports from 27+ platforms, tracks per property, supports MTD.

For long-term rental landlords: Landlord Vision or Xero — strong property tracking and MTD support.

For mixed portfolios: HMRC Reporter for STR properties + Xero for general accounting.

Set Up Your Digital Records

Add Your Properties

Enter each property’s details:

• Address
• Ownership structure (sole, joint, company)
• Letting type (long-term, short-term, mixed)
• Platform listings (Airbnb, Booking.com, etc.)

Set Up Expense Categories

Create consistent categories:

• Cleaning
• Maintenance and repairs
• Insurance
• Mortgage interest
• Utilities
• Council tax
• Platform fees
• Management fees
• Supplies
• Professional fees (accountant, legal)

Import Historical Data

If your software supports it, import historical data from your platforms. This gives you:

• A baseline for comparison
• Practice with the import process
• Data for your first quarterly submission

Create Your Quarterly Workflow

MTD means reporting four times a year instead of once. Build a routine:

Monthly (15–30 minutes)

• Import platform data
• Record expenses
• Reconcile bank transactions
• Check for missing entries

Quarterly (1–2 hours, once per quarter)

• Review all income and expenses for the quarter
• Check property-level totals
• Verify against platform reports
• Submit quarterly update to HMRC
• File any corrections from previous quarters

Annually (2–3 hours)

• Submit End of Period Statement
• Review annual totals
• Submit Final Declaration
• Archive records digitally

Prepare Your Team (If Applicable)

If you have staff or work with accountants:

For Staff

• Train on the new software
• Create a process for recording transactions
• Set up shared access to digital records

For Accountants

• Ensure they support MTD submissions
• Give them access to your software
• Agree on who submits quarterly updates
• Clarify responsibilities for End of Period Statement

For Landlords You Manage For

• Inform them about MTD requirements
• Explain what data you’ll provide quarterly
• Get their authorisation for submissions
• Set expectations for reporting frequency

Common Preparation Mistakes

1. Waiting Until the Deadline

MTD starts April 2026 for income over £50,000. If that’s you, you need to be ready now — not scrambling in March.

2. Choosing the Wrong Software

General accounting software might not handle property-specific needs. Short-term rental income requires platform import. Choose software that fits your specific situation.

3. Not Testing Before Going Live

Run a practice quarter before your first real submission. This catches gaps in your process while there’s still time to fix them.

4. Ignoring Expense Tracking

MTD requires digital expense records. If you’re still stuffing receipts in a drawer, start photographing them now.

5. Not Informing Landlords

If you manage properties for others, they need to know about MTD. Don’t surprise them with quarterly submission requirements.

Your MTD Preparation Checklist

• Calculate gross property income
• Confirm your MTD start date
• Choose MTD-compatible software
• Add all properties to the software
• Link platform listings to properties
• Set up expense categories
• Import historical data (if possible)
• Start recording transactions digitally
• Run a practice quarterly submission
• Train any staff on the new process
• Inform landlords you manage for
• Agree responsibilities with your accountant
• Set calendar reminders for quarterly deadlines
• Create a backup process for digital records

Frequently Asked Questions

Q: How long does MTD preparation take? A: Most property managers can get set up in 1–2 weeks. The main time is choosing software, adding properties, and learning the system.

Q: Do I need to digitise all my old records? A: No. MTD applies going forward from your start date. You don’t need to digitise historical records, but it can be useful for comparison.

Q: What if I’m not ready by my MTD start date? A: Start as soon as possible. HMRC’s penalty system is points-based — a few late submissions won’t immediately trigger fines, but persistent failures will.

Q: Can my accountant handle all of this? A: Your accountant can submit on your behalf, but you still need to keep digital records. Both of you need access to MTD-compatible software.

Q: What software do you recommend for short-term rental managers? A: HMRC Reporter — it imports platform data, tracks per property, and supports MTD. It’s built specifically for short-term rental income.

Start preparing for MTD today. HMRC Reporter helps property managers go digital and stay compliant. Learn more →