Choosing the Right Software for Making Tax Digital for Landlords

From 6th April 2026, Making Tax Digital for landlords means many will have to use HMRC-recognised software to keep digital records of their rental income and expenses and submit quarterly MTD updates.

This applies to landlords and sole traders whose income from these areas is more than £50,000 for the 2024 to 2025 tax year. This threshold drops to £30,000 then £20,000 for the next two years, with qualifying landlords entering MTD the following April.

The government has released official guidance explaining how to select compliant software and what features to watch for.

What Your Software Must Do

Your software (or a combination of tools) must:

• Create, store, and correct digital records of property income and expenses.

• Send quarterly updates to HMRC.

• Submit the final Self Assessment return by 31 January following the tax year.

• Support reporting on other income sources (such as pensions and dividends) even if you keep digital records only for rental income.

Types of Compliant Software

All-in-One Software

 Tools like Landlord Studio, Hammock, Xero, FreeAgent and QuickBooks allow direct record-keeping, quarterly submission and final return filing in one package.

Bridging Software

If you prefer using spreadsheets or legacy systems, bridging tools can connect existing records to submit updates to HMRC digitally exactly as required.

Choosing the Right Features

When evaluating software, consider whether it:

• Supports all landlords’ income types required under MTD (UK & foreign property, self-employment) and additional sources like your savings interest

• Enables both quarterly updates and final returns submission.

• Works with your accounting calendar (standard or calendar year, for example).

• Offers multi-user access, especially if working with an accountant or agent.

• Fits your budget. Free options may have function limits; paid versions vary in features.

Where to Find Compatible Software

 The HMRC site includes a software finder tool. Answer questions about your income sources and accounting setup to get a list of recognised products tailored to your needs. If your current software isn’t listed, contact the provider to ask about their MTD roadmap as they might be planning upgrades to accommodate the new rules.

Start Early: Why You Should Prepare Now

Using compliant software early gives you time to familiarise yourself before MTD deadlines apply. Early adoption helps reduce filing errors, avoids potential fines (increasing from 2025) and streamlines your tax admin ahead of the deadline that applies to you.

Summary Table 

Requirement	Feature to Look For
Digital record-keeping	Auto bank feeds, receipt scanning, and manual entries
Quarterly updates & return filing	Direct submission capabilities
Other income sources	Pensions, dividends, and partnerships support
HMRC-recognised software	Listed via gov.uk or compliant with bridging tools
Multi-user or agent access	For sharing reports with accountants or agents
Budget considerations	Tiered pricing, free trials, and limitations are worth comparing

Making Tax Digital for Landlords

Choosing the right software for Making Tax Digital for landlords now is essential for smooth compliance with the upcoming requirements. HMRC-approved tools guarantee that you can keep accurate digital records, submit quarterly updates and file final declarations as required.

Whether you choose an all-in-one solution or bridging software for existing records, planning early will help prevent errors, ensure on-time submissions, and ultimately make tax management simpler and more reliable.

With this increased requirement on your time, lighten the burden by enlisting us to help with your property management. We give your tenants a professional service without you having to lift a finger. Contact us today to find out more.