Self-employed and a landlord: how Making Tax Digital works with two income sources

Why your two incomes are tested together

Making Tax Digital for Income Tax doesn’t assess your business and your lettings separately. HMRC adds your gross self-employment turnover to your gross property income, both before expenses, and compares the total with the threshold. Profit doesn’t come into it.

The thresholds are phased in:

• qualifying income over £50,000: from 6 April 2026
• over £30,000: from 6 April 2027
• over £20,000: from 6 April 2028

If your qualifying income is £20,000 or less, you’re not yet required to join. Our guide to MTD income thresholds explains how HMRC decides which year’s figures apply, and GOV.UK sets out the rules in who must use MTD and when.

Two modest incomes can bring you in together. Say James has £18,000 of self-employment turnover and £14,000 of rent a year. Neither income is over £20,000 on its own. Added together they make £32,000, which is over £30,000, so on those figures he would need to use MTD from 6 April 2027.

Worked example: Sarah, graphic designer and part-owner of a flat

Sarah is a self-employed graphic designer with turnover of £32,000 a year. She also owns half of a flat with her brother. The flat brings in £24,000 of rent a year.

Only her share of the rent counts towards her qualifying income:

£44,000 is over £30,000 but not over £50,000. So for 2027 to 2028, Sarah needs to use Making Tax Digital from 6 April 2027, for both her business and her share of the flat.

Two things are worth noticing. Her business turnover alone would already have brought her in from April 2027, but once she’s in, her property income has to be reported through MTD too. And if she had wrongly counted the full £24,000 of rent, she’d have reached £56,000 and thought she needed to start a year earlier.

If you own the property jointly

Jointly owned rental income is split by ownership share. Each owner reports their own share, and the threshold is measured per person.

In Sarah’s example, her brother’s £12,000 share is tested against his own income, not hers. He might have no other self-employment or property income and stay below the threshold, while Sarah is in. Each of them also has their own penalty points record, so one owner’s late update never affects the other.

Each source gets its own quarterly updates

Once you’re in MTD, you keep digital records and send HMRC four quarterly updates a year for each income source. Sarah has two sources, her design business and her UK property share, so she sends two sets of updates: eight in total each year.

The deadlines are the same for both sources: 7 August, 7 November, 7 February and 7 May. Each update is cumulative. As GOV.UK puts it, it covers “from the start of the tax year to the end of the update period, not just the previous three months”. Updates carry no tax payment. You can read more on sending quarterly updates.

If you had a second business, or overseas property, each of those would need its own updates as well.

Choosing update periods for each source

You can use standard update periods (cumulative from 6 April, ending 5 July, 5 October, 5 January and 5 April) or calendar update periods (cumulative from 1 April, ending 30 June, 30 September, 31 December and 31 March). The deadlines don’t change.

The choice is made in your software, and you select calendar update periods for each source of income before you send your first quarterly update. That means your business and your property can be set differently if that suits your records. GOV.UK suggests calendar periods are worth considering if your accounting period runs from 1 April to 31 March. Once you’ve sent a quarterly update for a tax year, you can’t change the periods for that year.

If your business accounts are drawn up to a date other than 5 April or 31 March, an accountant can advise on how that fits. Our guide on standard or calendar quarters goes into the choice in more detail.

One tax return covers everything

However many sources you have, there’s one tax return for the year. It brings together your business and property figures along with any other income and reliefs, and it’s due by 31 January following the end of the tax year. For 2027 to 2028 that’s 31 January 2029, though you can submit earlier.

You need to have sent your quarterly updates for every source before you can submit the return. If one source falls behind, that’s the one holding up the whole return. A late tax return and late payment are penalised, so it pays to keep both sets of records moving through the year. GOV.UK covers the year-end step in submitting your tax return.

Keeping both incomes in one place

Running two sets of records in two different places is where things tend to slip. Quarterwise handles self-employment, UK property and overseas property in one account, using HMRC’s self-employment expense categories for the business side, and files the quarterly updates for each source and the year-end tax return.

The Free plan covers one self-employment business or one property, so someone in Sarah’s position would need Pro (£12 a month or £99 a year), which allows unlimited businesses and properties.

This guide is general information, not tax advice.

Common questions

Last updated 6 October 2026. Quarterwise is software, not a tax adviser — if you’re unsure how the rules apply to you, check with HMRC or a qualified accountant.