Making Tax Digital for Landlords in Scotland - The Changes from 2026

• Additional Updates to HMRC

  Instead of reporting once a year, you’ll now be required to send four digital summaries of your rental income and expenses.

  These don’t calculate your final tax bill but keep HMRC updated.

• Final End of Year Declaration

  At the end of each tax year, you’ll make a final declaration, confirming your total rental income, expenses, allowances, and tax due.

  This will replace the Self Assessment return you currently file.

• Use Approved Software

  HMRC requires you to use software that links directly to their systems.

  If you currently use spreadsheets, you may need software or to switch to a dedicated package (e.g. landlord accounting tools, or cloud based software).

  This is where Rettie can help. We are partnering with Free Agent who are leaders in this field to make the transition to MTD seamless for our Landlord clients.

• Follow the New Penalty Rules

  Late or missed submissions will trigger penalty points. If you accumulate too many, you’ll be faced with fines.

• Check if You’re Exempt

  Some will be exempt. Those who cannot engage digitally due to age, disability, or location issues. Some categories (like trustees) are also exempt.

Why This Matters to Scottish Landlords

• Scottish Tax Rates Apply

  The rental income you report under MTD is still subject to Scottish tax bands and rates, which differ from those in England. HMRC’s system will take these into account, but your liability may differ from landlords elsewhere in the UK due to this.

• Joint Income Clients

  If you’re both self-employed and also landlords, your combined gross income decides whether you will cross the MTD threshold.

• Jointly Owned Property

  Each landlord must report their share of the rental income and expenses separately under MTD.

What Landlords Should Do Now

• What You Should Do First

  Check your income levels. Look at your 2024/25 Self Assessment. If your rental + self-employment income is over £50,000, you’ll need to comply with MTD from April 2026.

• Suitable Software

  Rettie are partnering the Free Agent to integrate their software package for this transition. You will update everything for your digital tax submission via their software. This ultimately will be integrated within our landlord portal for ease of use.

• Get Used to Digital Record Keeping

  Even if you’re not required to join until 2027 or 2028, it would be prudent to start tracking rent and expenses digitally now. This will ensure that you are best placed to embrace the change when it takes effect for you.

• Talk to Your Accountant or Letting Agent

  Many landlords rely on agents or accountants. Make sure they are prepared and can manage MTD reporting on your behalf.

• Budget for Extra Time and Costs

  There might be additional costs for software subscriptions, possible accounting support, and quarterly submissions will add a new layer of admin for you.