Best Accounting Software for Landlords Under Making Tax Digital

The best accounting software for a landlord under Making Tax Digital is whichever HMRC-recognised product can record rent and expenses per property, handle joint ownership, and file quarterly updates without manual retyping. There is no single correct answer, because a landlord with two flats and one with fourteen units and a monthly agent statement need very different tools. What every option must do is the same: keep digital tax records of property income and submit four quarterly updates plus a final declaration to HMRC. Making Tax Digital landlords 2026 obligations started on 6 April 2026 for those with qualifying income above £50,000, so software choice is a live decision rather than a future one. Blue Tick Accountants, a Guildford-based UK tax advisory and accountancy practice, sets landlords up on compatible systems across the UK. This article covers what the software must do, the categories available, what they cost, and the deadlines they need to meet.

Key Takeaways

• Landlords with qualifying income above £50,000 have been within Making Tax Digital for Income Tax since 6 April 2026, with the threshold falling to £30,000 in April 2027 and £20,000 in April 2028.
• MTD software for landlords must be on HMRC's published list of recognised products, keep digital records of every transaction, and submit through a digital link with no manual retyping.
• Property-specific software typically costs between £60 and £300 a year, materially less than the £200 penalty triggered by a fourth late quarterly update.
• An MTD ITSA landlord must file quarterly updates by 7 August, 7 November, 7 February and 7 May, plus a final declaration by 31 January after the tax year ends.
• Spreadsheets remain permissible only when connected to HMRC through bridging software that carries figures across without rekeying.
• Jointly owned property can be reported quarterly on gross rent share alone, with expense detail deferred to the final declaration.

What must accounting software do for a landlord under Making Tax Digital?

MTD software for landlords must be recognised by HMRC, store every income and expense transaction digitally, and transmit quarterly updates and the final declaration through a digital link. Anything that cannot do all of that is not compliant, however good it is at bookkeeping.

Beyond the legal minimum, the useful features are specific. Property-level tracking shows which flat is profitable rather than only the portfolio total. Automatic bank feeds remove the monthly typing that causes most missed transactions. Receipt capture by phone camera turns a paper trail into digital tax records of property income at the moment of spending, which is where compliance is usually won or lost.

Two further features are worth paying for. The first is separate treatment of mortgage interest, because finance costs are restricted to a 20% tax reducer under Section 24 rather than deducted as an expense, and software that lumps them into ordinary costs produces the wrong figure. The second is joint ownership splitting, so shared property is apportioned automatically instead of by hand each quarter.

Which landlords need MTD-compatible software in 2026/27?

Any individual landlord whose qualifying income exceeded £50,000 in the 2024/25 tax year has needed compatible software since 6 April 2026. Qualifying income is gross rent plus gross self-employment turnover, measured before expenses and before mortgage interest, so the test catches landlords with thin margins.

The threshold falls to £30,000 from April 2027 and £20,000 from April 2028, so a landlord holding a single property with £22,000 of annual rent will be in scope within two years. Buying software now, rather than in the month before mandation, gives you a full year of clean records before the first quarterly update matters.

Property held inside a limited company is outside Making Tax Digital for Income Tax, because company profits are reported through corporation tax. A landlord with three personally held flats and one company-owned house therefore needs MTD software for the three, not the four. For the full picture of preparing a property business for the regime, see our guide to Making Tax Digital for landlords.

What are the main types of MTD software for landlords?

MTD software for landlords falls into three categories: dedicated property platforms, general small business accounting packages, and spreadsheets paired with bridging software. Each suits a different size of portfolio.

Dedicated property software is built around tenancies, so it handles per-property profit and loss, agent statements, deposits and service charges without configuration. It is usually the fastest route for a landlord with three or more units and the only category that treats a portfolio as a portfolio rather than a generic business.

General accounting packages fit better where a landlord also runs a trade, because both income sources sit in one system and the software files separate quarterly updates for each. The trade-off is setup: property categories have to be built manually, and mortgage interest needs its own treatment.

Spreadsheets with bridging software are the cheapest option and suit a landlord with one or two long-let properties. Before committing, check the product against HMRC's published list of software recognised for Making Tax Digital for Income Tax, because a package that supports MTD for VAT does not automatically support the income tax regime.

How much does MTD software cost a landlord?

Dedicated property software typically costs between £60 and £300 a year depending on the number of units, while bridging software for a spreadsheet user starts nearer £30 a year. Against the cost of getting it wrong, both figures are small.

Consider a landlord with four properties producing £58,000 of gross rent. Property software at £180 a year sits against roughly £16,000 of allowable running costs and is itself deductible, so the after-tax cost to a higher rate taxpayer is about £108. If that landlord accumulates four late quarterly updates, the resulting £200 penalty exceeds the entire annual software cost, and the accountancy time spent rebuilding a year of records from bank statements costs several times more again.

Digital record keeping is mandatory once you are in scope, so the real comparison is not software against nothing. It is between a product that suits your portfolio and one that does not.

What deadlines and penalties must an MTD ITSA landlord meet?

An MTD ITSA landlord must submit quarterly updates by 7 August, 7 November, 7 February and 7 May, and a final declaration by 31 January following the end of the tax year. For 2026/27 the dates are 7 August 2026, 7 November 2026, 7 February 2027, 7 May 2027 and a final declaration on 31 January 2028.

Quarterly updates are cumulative summaries of income and expenses by category. No tax is payable on submission, and payment dates are unchanged: the balancing payment and first payment on account remain due on 31 January, with the second on 31 July.

Late submissions are penalised on points. Each late quarterly update earns one point, and a fourth point within the rolling period triggers a £200 penalty. Late payment of tax is charged separately at 3% of the outstanding amount at day 15 and again at day 30, then at an annualised 10% from day 31. Software that sends deadline reminders is therefore doing more than housekeeping.

Landlords below the qualifying threshold continue with the annual process described in our guide to self-assessment for landlords.

Frequently Asked Questions

Do I need separate software for each rental property?

No. One MTD-compatible product covers your whole UK property business, and HMRC treats all your UK rentals as a single income source for quarterly reporting. Good software still tracks each property separately inside that single return so you can see individual performance. A separate income source is only needed for overseas property, which is reported apart from the UK property business.

Can I use free software for Making Tax Digital as a landlord?

A small number of HMRC-recognised products offer free tiers, usually limited by transaction volume or number of properties. Free options are realistic for a landlord with one property and few transactions, but most lack bank feeds, receipt capture and joint ownership splitting. Always confirm a free product appears on HMRC's recognised list for Income Tax, not only for VAT.

Does my letting agent's statement count as a digital record?

No. A letting agent's statement is supporting evidence, not a digital record. You must record the underlying gross rent and the agent's fees as separate transactions in your own MTD-compatible software. Recording only the net amount the agent pays you understates both income and expenses and will produce an incorrect quarterly update.

What software do joint owners of a property need?

Joint owners each need their own MTD-compatible software and each file their own quarterly updates, because Making Tax Digital applies to individuals rather than to properties. HMRC allows joint owners to report their share of gross rent quarterly and defer expense detail to the final declaration, so the quarterly requirement is lighter than for a sole owner.

Can I change software part way through the tax year?

Yes, provided the digital records transfer across intact and the digital link to HMRC is maintained. Move at a quarter end rather than mid-quarter, and carry the cumulative year-to-date figures into the new system, since quarterly updates report cumulatively. Keep the old records for at least five years after the 31 January filing deadline.

How Blue Tick Can Help

Blue Tick Accountants reviews a landlord's portfolio, recommends software matched to its size and structure, and handles the setup, the HMRC sign-up and the quarterly filing. The practice works with landlords holding anything from a single flat to sizeable portfolios, including jointly owned and mixed personal and company property. Head to our website and book a meeting now.

Conclusion

Software choice under Making Tax Digital is a portfolio decision, not a price decision. Match the product to how you hold property: dedicated platforms for multiple units, a general package where you also trade, bridging software where a spreadsheet already works. Confirm your choice appears on HMRC's recognised list for Income Tax, and get it running a full quarter before your first update is due so the deadline arrives with the records already complete.

About the Author

This guide was written by Leon, founder of Blue Tick Accountants, a Guildford-based UK tax advisory and accountancy practice that helps landlords, limited company owners and the self-employed across the UK. It was last reviewed for the 2026/27 tax year.

This article is intended for general informational purposes only and does not constitute tax, legal, or financial advice. Tax rules are subject to change and their application will depend on your individual circumstances. You should always seek advice from a qualified professional before taking action. Blue Tick Accountants accepts no liability for decisions made on the basis of this content.

Related reading: 5 MTD Mistakes Landlords Are Already Making, and How to Fix Them.

Related reading: Quarterly MTD Returns for Landlords: What You Actually Need to Submit.