MTD for Limited Company Landlords 2026: Do You Need It?

Making Tax Digital arrived for landlords in April 2026, and a lot of limited-company landlords have been quietly panicking about quarterly updates. Here is the short version that should end the panic: if you hold your property through a limited company, MTD for Income Tax does not apply to you.

But "it does not apply" is not the same as "there is nothing to do". This guide covers why companies are outside MTD, what you actually file instead, the free-filing service that closed in 2026, and the one situation — a very common one — where a company landlord is dragged into MTD after all.

This is guidance, not tax advice. Check GOV.UK or your accountant for your own position.

Why companies are outside MTD

Making Tax Digital for Income Tax (MTD ITSA) is exactly that — for Income Tax. It applies to individuals with self-employment or property income over the thresholds.

A limited company does not pay Income Tax on its rental profit. It pays Corporation Tax, and Corporation Tax sits entirely outside Making Tax Digital. HMRC confirmed in its Transformation Roadmap of 21 July 2025 that it will not introduce MTD for Corporation Tax, and has set no future date for it. So a company that holds property has no obligation to keep MTD-format digital records or file quarterly updates for its rental income.

If you moved your portfolio into an SPV (a special-purpose company) for the Section 24→ mortgage-interest treatment, this is one of the incidental upsides: no quarterly MTD cycle on the company's property income.

What a company files instead

Outside MTD does not mean outside filing. A limited company landlord files:

It is an annual cycle, not a quarterly one. No four-times-a-year updates, no cumulative running totals — the thing MTD ITSA imposes on personal landlords simply is not there for a company.

The 2026 change that does affect you

There is one thing that changed for company landlords in 2026, and it is not MTD. HMRC's free Company Accounts and Tax Online (CATO) filing service — the old free portal for filing a CT600 and accounts — closed permanently on 31 March 2026.

From 1 April 2026, every limited company must file its CT600 and statutory accounts using commercial software, not the free HMRC/Companies House tool. So if you used to file your own company return through the free service, that route is gone, and you will need compatible software (or an accountant who has it). It is a filing-mechanism change, not a new tax, but it is the practical thing a company landlord needs to sort out for 2026.

The trap: property in a company AND in your own name

Here is where company landlords do get pulled into MTD. The company/Income-Tax line is drawn per owner, not per landlord-as-a-person. So if you hold some property through a company and some in your own personal name, the two are treated separately:

So "I have a limited company" does not exempt your personally-held lets. Landlords with a mixed structure are the ones most likely to get this wrong, because they assume the company status covers everything. It does not.

How LetCompliance helps — honestly: we are built for the personal, Income-Tax side — SA105-shaped records and MTD-dated quarterly figures for property you hold in your own name. For the company's CT600 and statutory accounts you need company-accounts software or an accountant; we do not file Corporation Tax and do not pretend to. If your portfolio is mixed, we keep the personal-income side MTD-ready while the company side runs on its annual cycle.

Sources

What your company actually pays, and when

Since MTD for Income Tax does not apply, the company timetable is the one to run your year around.

Corporation Tax is charged at 19% on profits up to £50,000, 25% from £250,000, with marginal relief between the two. Note that those thresholds are divided by the number of associated companies, which catches landlords running several SPVs — three companies means the £50,000 band becomes £16,666 each, and profits hit the higher rate far sooner than expected.

The deadlines are the wrong way round compared with Self Assessment, and this trips up landlords moving from personal ownership:

So you pay first and file later, and there is no equivalent of the 31 January "do it all at once" date. Separately, accounts go to Companies House within nine months of the year end, and a confirmation statement is due annually.

The practical consequence is that your records need to be reliable at the nine-month mark, not the twelve-month one.

Extracting the money is where the tax actually lands

The comparison that matters is not Corporation Tax against Income Tax. It is Corporation Tax plus the cost of getting the profit into your hands, against Income Tax alone.

Profit taxed at 19% inside the company is not yours. Taking it out costs again:

This is why incorporation suits landlords reinvesting rather than drawing an income. If the profit stays in the company to buy the next property, you have deferred the second layer of tax and Section 24 no longer applies, because a company deducts mortgage interest as a normal business expense. If you need the rent to live on, much of the advantage is consumed by extraction.

One quieter point in favour of companies from April 2027: the 2 percentage point rise on property income applies to individuals, not to Corporation Tax. A higher-rate landlord goes from 40% to 42% on rental profit while the company rate is unchanged, which widens the gap slightly.

What incorporating actually costs

The reason "should I incorporate" rarely has a clean answer is that the entry costs are large, immediate and often ignored in the modelling.

Moving property you already own into a company is a sale to a connected party at market value, with two consequences:

There is a narrow relief — incorporation relief under s.162 TCGA 1992, which can defer the CGT where the portfolio is run as a genuine business rather than a passive investment. It turns on facts such as hours worked and degree of management, it is frequently claimed optimistically, and it does not touch the SDLT→.

Then the running costs: annual accounts and a CT600, usually £800 to £2,000 a year, plus company mortgage rates typically 0.5 to 1 percentage point above personal buy-to-let, and lenders generally requiring personal guarantees anyway.

The honest summary. Incorporation tends to work for landlords buying new property in a company, holding several properties, paying higher-rate tax and reinvesting the profit. It rarely works for one or two existing properties owned by a basic-rate taxpayer who needs the income. The entry cost is the deciding number far more often than the tax rate is. This is not tax advice: the interaction of CGT, SDLT and extraction is individual, so model it with an accountant before you act.

Running the records either way

Whichever structure you land on, the underlying discipline is identical, and it is the part that decides how painful either regime is.

Rent recorded per tenancy with dates. Expenses captured against the property when they happen, with the invoice attached, and labelled repair or improvement at the time, because that distinction decides whether it reduces this year's profit or your capital gain on sale, and nobody reconstructs it accurately two years later. Mortgage interest separated from capital. A clean split between company-owned and personally-owned properties, because HMRC treats them as two entirely different taxpayers.

Records either way: rent matched to the tenancy, expenses captured against the property with the invoice attached and labelled repair or improvement at the time. Year end produces SA105-shaped figures for personally-held property and clean per-property profit and loss for whatever your accountant needs on the company side. Start free, then hand your accountant figures instead of a shoebox.