MTD for Limited Company Landlords: What to Know

If you own rental properties through a limited company, you've probably seen the headlines about Making Tax Digital and wondered: does this apply to me? The answer isn't as straightforward as you might hope, and the confusion is entirely understandable. HMRC's MTD programme has multiple strands, each targeting different types of taxpayer, and the rules for limited companies are fundamentally different from those for individual landlords.

Here's the short version: MTD for Income Tax Self Assessment (MTD for ITSA) does not apply to limited companies. It applies to individuals, sole traders, and partners in partnerships. But — and this is a significant 'but' — if you're a director of a property company and you also own rental properties personally, your personal property income absolutely falls within scope.

This article cuts through the confusion. We'll explain exactly who is and isn't affected, what the timelines look like for both individual and corporate landlords, and what you should be doing right now regardless of your structure. Whether you hold properties personally, through a Ltd company, or a mixture of both, you'll know exactly where you stand by the end.

MTD for ITSA vs MTD for Corporation Tax

HMRC is rolling out Making Tax Digital in phases across different tax regimes. The two that matter to landlords are MTD for ITSA (Income Tax Self Assessment) and MTD for Corporation Tax. These are entirely separate programmes with different timelines, different requirements, and different affected groups. Conflating them is the single biggest source of confusion for property investors.

MTD for ITSA targets individuals who file a Self Assessment tax return. This includes sole trader landlords and those who receive rental income in their personal name. If your qualifying income (from self-employment, property, or both) exceeds the relevant threshold, you must keep digital records and submit quarterly updates to HMRC using compatible software.

MTD for Corporation Tax, on the other hand, will eventually require limited companies to do something similar — but for their Corporation Tax returns. This programme is on a completely separate and later timeline. As of early 2026, HMRC has not confirmed mandatory start dates for MTD for Corporation Tax, though voluntary pilots may begin in the coming years.

Am I Affected? Quick Reference Scenarios

The table below covers the most common scenarios we see among UK landlords. Find the row that matches your situation to understand whether MTD for ITSA applies to you right now.

When Limited Company Landlords ARE Caught

While your limited company's rental income is outside MTD for ITSA, there are several common scenarios where you, as the individual behind the company, could still be caught. These often surprise landlords who assumed their corporate structure protected them entirely.

The most common scenario is owning properties both personally and through a company. Perhaps you started your portfolio in your personal name before incorporating, and kept some of the original properties outside the company due to stamp duty costs or mortgage restrictions. If the rental income from those personal properties exceeds the relevant threshold, you are squarely within scope.

Another scenario involves directors who have self-employment income alongside their company directorship. If you do any freelance work, consulting, or run a sole trader business on the side, that income combines with any personal property income to determine whether you hit the threshold. A director earning £25,000 from personal rental properties and £30,000 from freelance consulting has qualifying income of £55,000 — well above the Phase 1 threshold.

• Personal properties retained outside the company structure — common when incorporation would trigger CGT or SDLT
• Properties held in joint names with a spouse — your share of the income counts towards your personal threshold
• Self-employment income from any trade or profession, combined with personal property income
• Property income received through a partnership, where your individual share counts
• Holiday lettings managed personally (note: the Furnished Holiday Let tax regime ended in April 2025, but the income still counts as property income)

It's worth noting that salary and dividends you draw from your own limited company do not count as qualifying income for MTD for ITSA purposes. Only self-employment income and property income (received personally, not through a company) are included in the threshold calculation.

MTD for Corporation Tax: The Separate Timeline

If you operate exclusively through a limited company, MTD for Corporation Tax is the programme you need to watch. HMRC has confirmed that Making Tax Digital will eventually extend to Corporation Tax, but the timeline is considerably behind MTD for ITSA.

As of February 2026, HMRC has not set mandatory dates for MTD for Corporation Tax. The government has indicated that it will not be mandated before the 2026/27 tax year at the earliest, and most tax professionals expect it to be several years after that. A voluntary pilot may open before any mandatory requirement, giving companies time to test compatible software.

When MTD for Corporation Tax does arrive, limited companies will likely need to keep digital records and submit quarterly updates to HMRC, similar to the MTD for ITSA process. The exact requirements, thresholds (if any), and software standards are yet to be confirmed.

What About Mixed Portfolios?

Many experienced landlords operate a mixed structure — some properties held personally, others within a limited company. This is often the result of a gradual incorporation strategy, where newer acquisitions go into the company while older properties remain in personal ownership to avoid triggering capital gains tax or stamp duty land tax on a transfer.

If you're in this position, you need to think about your tax obligations on two separate tracks. Your personal rental income falls under MTD for ITSA rules if it exceeds the relevant threshold. Your company's rental income continues under the existing Corporation Tax regime until MTD for Corporation Tax is mandated.

Here's a practical example. Sarah is a director of Greenfield Properties Ltd, which owns six buy-to-let flats in Manchester generating £72,000 per year in gross rental income. Sarah also personally owns two terraced houses in Leeds that bring in £18,000 per year. Additionally, she does some property sourcing as a sole trader, earning around £35,000 per year.

Sarah's qualifying income for MTD for ITSA is £53,000 (£18,000 personal property income + £35,000 self-employment income). The £72,000 earned by her limited company is irrelevant to this calculation. Sarah falls into Phase 1 (April 2026) and must comply with MTD for ITSA from the 2026/27 tax year.

However, Sarah only needs to report her personal property income and self-employment income through MTD-compatible software. Her company's income continues to be reported through the company's Corporation Tax return as normal.

What Limited Company Landlords Should Do Now

Even if MTD for Corporation Tax is years away, there are concrete steps you should take now to protect yourself and prepare for the future. The landlords who will find the transition easiest are those who have already adopted good digital record-keeping habits.

• Audit your personal income: List all sources of self-employment and personal property income to determine whether you hit an MTD for ITSA threshold
• Check joint ownership: If you own properties jointly with a spouse or partner, confirm your share of the income and whether it pushes you over a threshold
• Separate personal and company records: Ensure your personal property income records are completely distinct from your company accounts
• Adopt digital record keeping now: Even if MTD for Corporation Tax is not yet mandated, switching to digital records ahead of time avoids a rushed transition later
• Talk to your accountant: Discuss your specific structure and confirm which MTD programmes apply to you and when
• Review your portfolio structure: If personal properties push you into MTD for ITSA, consider whether incorporating those properties makes financial sense (factoring in CGT and SDLT costs)
• Track the MTD for Corporation Tax timeline: Keep an eye on HMRC announcements for pilot programme dates and mandatory start dates
• Consider MTD-compatible software: Choose a platform that can handle both personal and company property portfolios, so you are ready for both programmes

How Latch Handles Both Personal and Company Properties

Latch is designed to meet HMRC MTD requirements and supports landlords regardless of how their portfolio is structured. Whether you hold properties personally, through a limited company, or a combination of both, you can manage everything from a single platform.

For personal property income that falls under MTD for ITSA, Latch's core compliance features help you maintain digital records that meet HMRC's requirements. You can track rental income and expenses, categorise transactions manually, and prepare your quarterly updates — all included in the free plan.

For landlords with larger or more complex portfolios, paid plans (from £20/month) unlock AI-powered transaction categorisation, unlimited property tracking, and advanced reporting. These features are particularly valuable for landlords managing mixed portfolios where keeping personal and company finances separate is critical.

By keeping your records digital and organised from the start, you'll be prepared not just for MTD for ITSA (if it applies to your personal income) but also for MTD for Corporation Tax when it eventually arrives for your limited company.

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