Making Tax Digital for Holiday Lets

Making Tax Digital (MTD) for Income Tax is a significant change for Holiday Let owners, introducing new requirements around digital record‑keeping and more frequent reporting to HMRC. We explain who is affected, when the changes begin, and how the phased thresholds work, so you can understand exactly when MTD will apply to you and what you need to prepare for.

Making Tax Digital (MTD) for Income Tax is being rolled out by HMRC in phases.  It requires Holiday Let owners to maintain digital accounting records and submit quarterly updates to HMRC using compatible software.  The requirements are based on turnover rather than profit and are assessed according to the tax year.

Who Is Affected?

‍MTD for Income Tax applies to sole traders and partnerships only.  It does not apply to holiday lets that are owned and run through a limited company, as the changes relate to Income Tax rather than Corporation Tax.

When MTD Begins

‍The start date for MTD depends on total turnover within a specific tax year.  It is not based on the calendar year or a rolling 12-month period.

Turnover threshold   Tax year assessed MTD start date First quarterly submission
‍

Over £50,000            2024/25                April 2026         7 August 2026
Over £30,000            2025/26                 April 2027         7 August 2027
Over £20,000            2027/28                 April 2028         To be confirmed

‍An Example Scenario:

‍If an owner’s turnover is below £50,000 in the 2024/25 tax year but exceeds £30,000 in 2025/26, they will not need to join MTD in April 2026 - even if their turnover goes above £50,000 during 2026.  Instead, they will enter MTD from April 2027, with their first quarterly submission due by 7 August 2027.