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What Is the MTD Final Declaration?
It is your annual tax return, filed through compatible software (software that works with MTD for Income Tax). HMRC has previously used "Final Declaration" to refer to the tax return. It is not an extra return on top of it, and HMRC's own guidance simply calls it your tax return.
Note: You may have heard of the End of Period Statement. It is no longer required.
Do Landlords Have to Use MTD for Income Tax in 2026/27?
Generally, you must use MTD for Income Tax for 2026/27 if you are an individual landlord or sole trader whose combined gross qualifying income (explained below) for 2024/25 was over £50,000, unless an exemption applies.
That £50,000 figure decides whether you must use MTD. It is not the test for whether you need to file a tax return at all. The threshold falls to over £30,000 from April 2027 and to over £20,000 from April 2028. For April 2027 the income year checked is 2025/26, and for April 2028 it is 2026/27.
"Qualifying income" has its own definition, and it is not simply your rental profit. It is generally your income from your relevant self-employment and property activities before expenses are deducted, subject to specific legal rules and exclusions.
Final Declaration Deadline and Penalty Points for 2026/27
The 2026/27 return is due by 31 January 2028, and the fourth quarterly update is due by 7 May 2027.
You can submit your tax return before the deadline if you are ready.
HMRC will not apply late submission penalty points to quarterly updates for 2026/27. This only applies to quarterly updates. The updates still have to be sent before your annual return can be submitted. If you miss the deadline for the annual return itself, you will receive a late submission penalty point.
For the tax year before you started using MTD, you still submit a Self Assessment return in the usual way.
Is the Final Declaration the Same as the Fourth Quarterly Update?
No. Once you have sent your fourth quarterly update, HMRC holds your property and self-employment income and expenses for the year. That does not finalise your tax position.
Before you file, you may need to adjust those figures. Your return then adds everything else, such as other income and gains.
What to Include in Your Final Declaration: The Checklist
Your return needs your property figures after any adjustments, any allowances or reliefs you can claim, any losses, other income and gains, and a check of what HMRC has added. The table shows each item and who is responsible.
What to include | Where it usually comes from | Who is responsible |
|---|---|---|
Your property income and expenses for the year | Your quarterly updates and digital records | You, adjusting where needed |
Year end adjustments, where they apply | Your software | You |
Allowances and reliefs, where you qualify | Your own circumstances | You, once the conditions are met |
Losses, where you have any | Your property records | You |
Other income and gains HMRC does not already hold | Your own records | You |
Information HMRC adds for you | HMRC's records | HMRC adds it, you check it |
Even when HMRC adds information to your return, you are still responsible for it. You must check that everything is correct and complete and add anything that is missing.
Your Property Figures: Confirming and Adjusting the Year's Numbers
You make most adjustments by changing the annual total for an expense category in your software. You do not need to change every individual transaction.
HMRC says you may need to make:
Tax adjustments. For example, removing expenses you cannot claim, known as disallowable expenses.
Accounting adjustments. For example, for prepayments or accruals. A prepayment is a cost paid in advance, and an accrual is a cost you have incurred but not yet paid for.
Accounting period adjustments. These may be needed if your accounting period (the period your records cover) does not line up with the tax year (6 April to 5 April).
Capital allowances. These let you deduct the cost of capital assets, such as plant and machinery (business equipment), where they apply.
Cash basis is the default for most individual property businesses, unless an exclusion applies or you choose traditional accounting. If you use cash basis, you do not need accounting adjustments.
If you choose traditional accounting, your software lets you adjust the annual totals.
HMRC's example is a £1,200 insurance policy paid in January for 12 months. Spread at £100 a month, £300 (three months) falls in the first tax year and £900 (nine months) in the next.
For capital allowances, record your claim in your software before you submit your return. HMRC will not process the claim until the return has been submitted. Whether you can claim depends on the item and your circumstances, so check before including one.
Allowances and Reliefs to Consider Before You Submit
Check the conditions first. Neither of the following applies to every landlord.
Property allowance. Up to £1,000, subject to conditions and exclusions.
Rent-a-Room relief. Generally, £7,500 a year for letting furnished accommodation in your home. It is reduced to £3,750 in relevant shared income cases.
If you plan to use Rent-a-Room relief, you can create digital records of that income during the year, and it will be included in your quarterly updates. Digital record rules can also apply to the trading allowance for qualifying self-employment income.
Losses
If you have losses, they are dealt with in your annual return. Whether and how you can use a loss depends on the tax rules, so do not assume a property loss can be set against salary or other income.
Other Income and Gains You May Need to Add
Your return covers more than property. HMRC says you may need to add:
savings interest
your share of profit from a partnership, as an individual partner
dividends, including those from your own company
payrolled benefits in kind that are not subject to Class 1A National Insurance contributions
any other income or gains not already added automatically
You must include all income sources and gains that are required for your tax return before you submit.
What HMRC May Add for You
HMRC may add the following if it holds the information:
employment (PAYE) income
student loan plan type and postgraduate loan, including repayments through PAYE
state, private and occupational pension income
other taxable state benefits
Construction Industry Scheme (CIS) subcontractor deductions
Capital Gains Tax on residential property disposals (such as sales)
Marriage Allowance claims
You can find these in your software when you ask for a calculation, or in your HMRC online services account. You must check them before you submit. This list only describes information HMRC may add. It does not explain what you must report if you sell a property.
Multiple UK Properties and Overseas Property
Multiple UK rental properties are generally treated as one UK property business, and you do not file a separate personal tax return for each property. An overseas property business is treated separately from your UK property business, but it does not need a separate annual tax return.
Step by Step: Preparing and Submitting Your Final Declaration
In short: send your quarterly updates, correct and adjust your figures, add everything else, check the calculation, then submit with a declaration.
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Worked Example: From the Fourth Quarterly Update to the Return
This example is fictional and illustrative only. It does not work out any tax. Category names in your software may differ.
A landlord has several UK rental properties and has sent all the quarterly updates. Their total property expenses come to £8,000. Within that, the category for phone, stationery and other office costs totals £1,000. Part of that is the cost of a phone that is also used for personal calls. The personal share is £350. That share cannot be claimed, so the landlord reduces the annual total.
Item | Before | Adjustment | After |
|---|---|---|---|
Phone, stationery and other office costs | £1,000 | less £350 | £650 |
Total property expenses | £8,000 | less £350 | £7,650 |
The landlord then adds £120 of savings interest that HMRC does not hold and checks the PAYE income HMRC has already added. Finally, they check the tax calculation and submit.
After You Submit
Your return generates your Self Assessment tax bill. MTD does not change how you pay or when payments are due.
If your tax is paid late, penalties may apply once the late-payment period has passed. Interest can also apply from the due date.
You can change a submitted return through your compatible software within 12 months of the submission deadline.
You cannot claim a tax refund through the MTD return. HMRC's guidance explains how to claim one separately.
Common Mistakes to Avoid
Treating the fourth quarterly update as the end. You may still need to adjust figures and add other income.
Assuming allowances and reliefs are automatic. Conditions and exclusions apply.
Forgetting other income and gains. The return must be correct and complete
Accepting what HMRC added without checking. You must check it.
Thinking the Final Declaration is an extra return. It is shorthand for your annual tax return.
Changing the return when the error is in your records. Before you submit, correct your digital records instead.
What to Check in Your Software
HMRC says you must submit your return using software that works with Making Tax Digital for Income Tax. As recommended practice, check three things:
Can it complete and submit the annual tax return, not only quarterly updates?
Does it appear in HMRC's software finder as working with MTD for Income Tax?
Does it handle the income you have, such as UK property, overseas property or self-employment?
Conclusion
Getting your return right comes down to a few habits. Keep your records accurate through the year, make any year end adjustments, check that you meet the conditions for any allowance or relief, add the income and gains HMRC does not hold, and review what HMRC has added. Then check the tax calculation before you submit it with your declaration.
Take time over that final check, because you are confirming that the information is correct and complete to the best of your knowledge.
