Making Tax Digital for Income Tax: what holiday let owners must do, and when

Status: IN FORCE for the first cohort since 6 April 2026 Last checked: 28 July 2026 Primary source: GOV.UK — Find out if and when you need to use Making Tax Digital for Income Tax (published 23 September 2021, last updated 26 March 2026)

Holiday let income is property income. Property income counts towards the Making Tax Digital threshold. That combination is why this page exists.

The threshold timeline, as published

GOV.UK states, in these terms:

• Qualifying income over £50,000 for the 2024 to 2025 tax year — "you will need to use it from 6 April 2026". This cohort is live now.
• Qualifying income over £30,000 for the 2025 to 2026 tax year — "you will need to use it from 6 April 2027".
• Qualifying income over £20,000 for the 2026 to 2027 tax year — "you will need to use it from 6 April 2028".

The £20,000 stage has its own GOV.UK measure page, "Making Tax Digital for Income Tax Self Assessment — reducing the mandation threshold from £30,000 to £20,000 from April 2028".

GOV.UK also states how you find out: "HMRC will assess your qualifying income for a tax year by checking the Self Assessment tax return that you submitted in the previous tax year."

Qualifying income is GROSS. This is the part people get wrong

GOV.UK's definition, verbatim:

"Qualifying income is your total income from self-employment and property. This is the amount before expenses (also known as turnover)."

Before expenses. Not profit. Not income after the mortgage, the cleaner, the agency commission, the council tax or the Airbnb service fee. A cottage grossing £52,000 in bookings and returning £11,000 of profit has qualifying income of £52,000, not £11,000.

What GOV.UK's guidance includes in qualifying income: income from self-employment and from property, and "Your total income may come from more than one source" — the sources are added together. Where a property is jointly owned, the guidance states "Your share of the property income will count towards your qualifying income", and gives the example of a jointly owned property generating £50,000 in equal shares producing £25,000 of qualifying income each.

What the guidance lists as not counted: employment (PAYE) income, an individual partner's share of partnership profits, dividends, the State Pension, private pensions, income from UK REITs or PAIFs, and basis period reform transition profits.

The quarterly deadlines, as published by HMRC

HMRC publishes two sets of update periods. These are the dates from GOV.UK's "Send quarterly updates" guidance (last updated 16 July 2026). Note the standard periods as published each run from 6 April.

Standard update periods

Calendar update periods

The annual step is separate from the four updates. GOV.UK states: "You must submit your tax return by 31 January following the end of the relevant tax year, but you can submit it earlier." The guidance also states "You will need to send your quarterly updates before you are able to submit your tax return."

For the first mandated cohort, the 2026 to 2027 tax year therefore runs: four quarterly updates due 7 August 2026, 7 November 2026, 7 February 2027 and 7 May 2027, then the tax return by 31 January 2028.

Software, and what "compatible" means

GOV.UK maintains the list of compatible products and is careful about its own role: "All software listed has been through HMRC's recognition process. HMRC does not recommend any product or software provider."

Spreadsheets are not excluded outright. GOV.UK's guidance describes bridging software that "can connect to existing records kept in spreadsheets or other accounting tools" — "if you use spreadsheets to record income and expenses, bridging software can connect to them and make your submissions to HMRC."

Exemptions

GOV.UK states: "There are different reasons why you may be exempt from Making Tax Digital for Income Tax. For example, you could be exempt if you are digitally excluded." The exemptions guidance refers both to a temporary exemption running until at least April 2027 and to digital exclusion, which may be permanent depending on circumstances.

Exemption is not an exit from Self Assessment. GOV.UK: "If you are exempt, you will not have to use Making Tax Digital for Income Tax but you must continue to report your income and gains in a Self Assessment tax return as normal."

Why this bites holiday lets harder than long lets

Nothing in the guidance singles out holiday lets. The arithmetic does. Gross short-term letting turnover on a single well-occupied property in a strong location can approach the £50,000 line on its own, and the £20,000 line from 2028 catches a much wider group. Because the test is turnover before costs, and because a joint owner counts only their share, two owners of the same £60,000-turnover cottage may sit on opposite sides of the threshold from a single-owner neighbour with identical bookings.

Software that helps

From our directory categories: Accounting, tax & Making Tax Digital (HMRC-recognised products and bridging software — always cross-check any claim of recognition against HMRC's published list, linked above); Property management systems (a clean, dated income and expense export per property, aligned to the update periods above); Compliance & licensing tools (deadline tracking alongside certificate expiry).

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This page summarises published government guidance and is not legal or tax advice. Last checked 28 July 2026.