MTD for HMO & Holiday-Let Landlords

If you let a house in multiple occupation or run a holiday let — on Airbnb, Booking.com, or direct bookings — most MTD content out there is written for a single conventional buy-to-let and doesn't quite fit your situation. This guide is written for you specifically, starting with the change that catches the most people out.

The furnished holiday lettings regime is gone

The furnished holiday lettings (FHL) tax regime — the special rules that used to let qualifying holiday lets claim capital allowances, mortgage interest relief, and other benefits ordinary rentals couldn't — was abolished from 6 April 2025. If you've been treating your holiday-let income as something separate and favourably-taxed, that distinction is gone: from that date, holiday-let income is taxed as ordinary property income, full stop.

The knock-on effect for Making Tax Digital is direct: holiday-let income now counts toward your MTD qualifying income exactly like any other rent. There's no separate, more generous threshold for furnished holiday lets, and no exemption for short-term or seasonal letting. If you previously assumed FHL status kept you out of scope for MTD, or kept your holiday income in a different mental bucket to your buy-to-lets, that assumption no longer holds — and it's worth checking your numbers again with that in mind.

Working out whether you're mandated

With FHL income now folded into ordinary qualifying income, add your holiday-let and HMO income together with everything else you let, gross, before expenses, and compare the total against the thresholds. The first threshold, £50,000, mandates MTD from 6 April 2026; the full three-wave table, with every date and the assessment-year logic behind it, lives in MTD deadlines & thresholds — this page won't repeat it, so you always get the current, correct figures from one source.

HMOs: room-level income, shared expenses

HMOs bring a wrinkle conventional single-let guidance rarely addresses: income arriving room-by-room or tenant-by-tenant, and expenses — utilities, cleaning, communal repairs, insurance — that are shared across the whole property rather than tied to one tenancy. For MTD purposes, none of that changes the underlying obligation: HMRC still wants your income and expense totals for the property (or portfolio) as a whole, reported cumulatively each quarter. It doesn't need a room-by-room breakdown in the submission itself.

That said, room-level detail is genuinely useful for your own record-keeping, and it maps naturally onto a spreadsheet: many HMO landlords already run one tab per property, with rows for each room's rent and a shared section for the property-wide costs. That format is already a digital record in the sense MTD requires — what changes is how those totals reach HMRC, not how you organise the spreadsheet day to day. This is exactly the gap Landlord MTD Software is built for: keep your per-property tabs and your existing habits, and let the bridging layer map your columns onto HMRC's categories and handle the quarterly submission underneath, rather than asking you to migrate years of HMO record-keeping into a new system.

The same logic extends to holiday lets that switch between short-term platform bookings and the occasional longer-stay tenancy — a mixed pattern that's common once FHL-specific record-keeping requirements stopped applying. Whether a given week's income came through a booking platform, a direct enquiry, or a longer let, it's still just rental income for MTD purposes, and it belongs in the same running total as everything else you let. You don't need separate categories or separate spreadsheets for platform bookings versus longer stays; one consistent digital record covering the whole property is enough.

Jointly owned HMOs and holiday lets

HMOs and holiday lets are commonly owned jointly — with a spouse, a business partner, or a wider group. The same rule applies here as for any other jointly owned property: only your own share of the income counts toward your qualifying income, not the full amount the property generates. Split ownership can mean one owner is mandated into MTD before another, even on the exact same HMO, depending on what other income each of you individually has. We cover the share rule in full, with worked examples, in our complete MTD for landlords guide.

The quarterly rhythm, in one sentence

Once mandated, the ongoing obligation is the same for HMO and holiday-let landlords as for anyone else: four cumulative quarterly updates a year, plus a year-end final declaration — see our quarterly filing dates guide for the exact deadlines, the cumulative-update rule, and the .ics calendar download.

What to do now

We know this is a lot to take in, especially if you were relying on FHL status and this is the first you're hearing it's gone. The practical next step is the same regardless of your portfolio shape: re-total your gross rental income, including holiday-let and HMO income together, work out your own share of anything jointly owned, and check the result against the current thresholds so you know your mandation date with certainty rather than guessing from outdated FHL-era assumptions. If MTD for Income Tax is entirely new to you, start with what Making Tax Digital for Income Tax actually is. Join the waitlist below and we'll email you before your deadlines bite.