MTD software for landlords: HMRC-recognised options compared

Byline: Written by the August editorial team. Last reviewed August 2026. August is one of the platforms reviewed here, and we say so plainly, where a competitor does something better, we say that too.

Making Tax Digital for Income Tax is live, and the first quarterly deadline has now passed. Landlords whose qualifying income exceeded £50,000 in 2024/25 have been required since 6 April 2026 to keep digital records and file quarterly updates through HMRC-recognised software. HMRC put more than 864,000 sole traders and landlords in this first phase, and reported that a large proportion had still not filed in the fortnight before the 7 August deadline. The threshold falls to £30,000 in April 2027 and £20,000 in April 2028.

If you are choosing software now, you are in one of two positions. You filed in August and want something better before 7 November, or you have not filed at all. This guide covers both. It explains what makes software MTD-compliant, compares the paid and free options, covers bridging software for spreadsheet users, and sets out what to do if you are behind. If you want the rules rather than the software, our explainer covers how Making Tax Digital for landlords works.

If you missed the first deadline

Nothing is lost, and you are in large company. HMRC is not issuing penalty points for late quarterly updates during 2026/27, so a missed 7 August update carries no points. That easement is narrower than it sounds. It does not cover the final declaration, and it does not cover late payment of tax or the interest that accrues on it.

Every quarterly update still has to be filed before you can submit the tax return for 2026/27, so a skipped quarter is deferred work rather than cancelled work. Because updates are cumulative from 6 April rather than discrete three-month snapshots, filing the November update brings the year to date up to 5 October and absorbs the period you missed. You do not file August's update separately and then November's.

The order of work, starting from nothing: confirm you are actually in scope using your 2024/25 qualifying income; choose recognised software and sign up through it rather than on the HMRC website; import the tax year from 6 April; then file by 7 November. From working with landlords through this first cycle, the step that consumes the most time is not the submission, which takes minutes, but reconstructing April to July from bank statements after the fact. That is the argument for a bank feed rather than manual entry, and the reason to start now rather than in the first week of November.

What does MTD-compliant software actually mean?

MTD-compliant software, also called MTD-compatible or HMRC-approved software, must meet three HMRC requirements: it must store your digital records of income and expenses; it must submit quarterly updates directly to HMRC via their API rather than a manual login to the government website; and it must support the final declaration at year end, which replaces your old Self Assessment return. HMRC maintains a list of recognised software on GOV.UK, which is the authoritative source for checking whether a product is genuinely approved, and it has a personalised software finder on the same page that shortlists by your income sources. Any software not on that list cannot legally be used for MTD submissions, however it is marketed. Recognition confirms a product can submit to HMRC correctly and nothing more, so treat it as the first of six checks rather than the whole of your due diligence.

For landlords specifically, the software should handle property income correctly: it should support the SA105 property income categories, apply Section 24 mortgage interest restrictions as a 20% tax credit rather than a deduction, and ideally track income and expenses at property level rather than in aggregate. The Section 24 point catches many landlords out, because general accounting platforms sometimes treat mortgage interest as a straightforward deductible expense, which produces incorrect tax figures and can lead to underpayment. Always verify this before committing.

MTD software handles the submission. The day-to-day books behind it are a separate job, covered in our guide to landlord accounting software.

The two types of MTD software

Full MTD software keeps your digital records and submits to HMRC in one workflow: you log income and expenses through the year, the software categorises them, and at each quarter end you review and submit from within the same tool. This is the approach of general accounting platforms such as Xero, QuickBooks, Sage and FreeAgent, and of landlord-specific platforms including Landlord Vision, Landlord Studio and August.

MTD bridging software is for landlords who want to keep records in a spreadsheet but need a compliant way to submit. It connects your spreadsheet to HMRC's API via a digital link, pulling figures across without manual entry into the portal. Copying and pasting figures into the HMRC website is not a digital link and is not compliant under the Income Tax (Digital Requirements) Regulations 2021. Bridging providers include AbraTax, RentalBux, AbsoluteTax and aligned.tax, the last of which is free for individuals filing their own quarterly updates. The choice comes down to complexity: with one or two properties, simple income and tidy spreadsheets, bridging is practical and cost-effective; with multiple properties, mixed income or a wish for automated bank feeds and categorisation, full MTD software saves far more time across the year.

Free MTD software for landlords

HMRC does not provide a free filing service for MTD for Income Tax, so every route to a free submission runs through a commercial provider. Several offer genuinely free tiers, and there are more of them than there were in April. The trade-off is almost always scope: free tiers cap the number of properties, stop short of the final declaration, or assume a single income source. All positions below were checked in August 2026, and terms in this market have moved repeatedly through the year.

ANNA is the most generous free offer currently available. Its own materials state that MTD for 2026/27 is free including all four quarterly filings and the final declaration, with quarterly filings free on a permanent basis. It is HMRC-recognised and works with any UK bank through open banking, so you do not need to move your banking to use it. It has no property management, tenancy records or compliance tracking, so it is a filing tool rather than a way to run a portfolio.

Clear Books offers a free tier covering digital records, quarterly updates and the end-of-year return, with no upgrade wall at the point of filing. It is a general accounting platform, so there is no tenancy, certificate or compliance tracking.

Starling Bank includes an HMRC-recognised MTD tool inside its free sole trader account, covering quarterly updates and categorising both business and property expenses, with end-of-year declarations described as coming. Worth knowing if you already bank there.

Landlord Studio has a free GO tier covering the first three units with bank feeds and income and expense tracking. MTD submission is charged separately, either per submission or by moving to a paid plan, so the free tier keeps your records rather than filing them.

RentalBux offers a free tier for single-property landlords, free until March 2028 per its own pricing, covering UK property, foreign property and self-employment.

FreeAgent is free for customers of NatWest, Royal Bank of Scotland, Mettle and Ulster Bank, which makes it the strongest bank-bundled deal on the market. As a general accounting platform, property-level tracking needs manual setup.

August is free for up to two tenancies and is recognised by HMRC for MTD for Income Tax, with quarterly submission on the Growth plan.

Not every landlord tool has a free tier. Hammock, the first landlord platform to gain HMRC recognition, runs a free trial rather than a permanent free plan, with pricing from £8 plus VAT per month for one to three properties, rising through £15 for four to ten and £25 for eleven to twenty.

Property Hawk closed in July 2026 and was never MTD compliant, so any landlord still relying on it needs a recognised tool before the 7 November deadline.

The honest summary is that free works well for a single property with straightforward income, and starts costing you time rather than money somewhere around the third or fourth property, where the absence of per-property reporting turns each quarterly review into a manual exercise. Free filing tools also tend to stop at filing. None of ANNA, Clear Books, Starling or FreeAgent will tell you a gas safety certificate is about to expire.

For a wider view of free tools beyond MTD filing, see our guide to free landlord software in the UK. If cost rather than the free tier specifically is the deciding factor, our comparison of the cheapest MTD software covers the paid entry level. Verify any free tier directly with the provider before relying on it. You can start for free with August and upgrade only when you need submission.

HMRC-approved software: what the list covers

"HMRC-approved" and "HMRC-recognised" mean the same thing: the software is on HMRC's official list and can submit directly to HMRC's systems. General accounting platforms with this status include Xero, QuickBooks, Sage, FreeAgent and Clear Books. Landlord-specific platforms with HMRC recognition include August, Hammock, Landlord Vision and Landlord Studio. August is recognised by HMRC for Making Tax Digital for Income Tax and appears on the GOV.UK software list for UK property income.

Recognition confirms a product can submit quarterly updates and final declarations correctly. It does not confirm the product handles property-specific tax calculations accurately, so always verify that any software applies Section 24 correctly rather than treating mortgage interest as a directly deductible expense.

MTD software vs general accounting software

General accounting software suits landlords who also run a self-employed business, since both income streams sit in one platform, and Xero and QuickBooks are the tools most accountants know, which helps if your accountant handles submissions. The drawback is that neither is designed around property: there is no tenancy tracking, compliance reminders or certificate storage, and property-level reporting needs manual setup. Purpose-built property management accounting software closes that gap, pairing HMRC-aligned categories with tenancy and compliance records in one place. For how dedicated landlord platforms compare with accounting-first tools, see our best property management software guide.

The Xero integration from August pushes your categorised income and expenses into Xero, so there is no double entry. Landlords who want property-specific records, but whose accountant works in Xero no longer have to choose between them, since August connects to Xero directly.

Why the MTD software question is really a property management question

Most comparisons treat MTD software as a pure accounting choice, which misses the bigger picture for landlords. MTD needs clean digital records of rental income and expenses, but those stay clean only if your rent collection, compliance and maintenance are organised too. A landlord using separate tools for each spends more time moving data between systems, with more chances for errors before submission. That is the practical case for an integrated platform, and it is where August's feature set feeds your MTD records.

Rent tracking via Open Banking matches incoming payments to the right tenancy in real time, recording every payment as it arrives and flagging partials, arrears and overpayments without manual reconciliation; our Open Banking guide explains why this produces more accurate records than reviewing statements by hand. 

Expense tracking lets you log and categorise every allowable expense as it arises, using HMRC-aligned categories, with receipts photographed in-app, a Xero connection for accountants who work there, and a clean export for those who do not. Our expense categorisation guide sets out how to categorise for MTD. Compliance management covers gas safety, EICR, EPC, Right to Rent, deposit protection and licensing, and when you pay for a certificate that payment is logged against the property, keeping expense and compliance records in step. Document storage keeps agreements, certificates and correspondence in one place, and maintenance reporting logs contractor payments against the repair ticket. The result is that your MTD records are a natural output of running the portfolio rather than something compiled separately each quarter. See what August includes on each plan.

Shared ownership and joint landlords

Under MTD, each co-owner is a separate taxpayer. If you own a property 50/50 with a partner, each of you reports your share in your own quarterly updates and registers individually. August supports this: set your ownership percentage when adding a property and it calculates your share of every transaction automatically, including non-50/50 splits, with both owners keeping separate accounts for the same properties.

Landlords with self-employment income

Many landlords also have self-employment income, and under MTD both streams are in scope, submitted separately, up to eight quarterly updates a year if both are active. Your software must support both SA105 (property) and SA103 (self-employment) categories, and not all landlord-specific tools cover self-employment, so confirm this if it applies to you.

Who does not need to comply

Properties held within a limited company are outside scope entirely, since MTD for Income Tax applies only to individual unincorporated landlords, though our guide to Making Tax Digital for limited companies explains what does apply. Partnerships are currently outside the rules, though individual partners with separate rental income may still be in scope personally. Ministers of religion and Lloyd's underwriters are currently exempt. Landlords who cannot reasonably use digital tools due to age, disability or remote location may apply to HMRC for a digital exclusion exemption, which is not automatic, and religious beliefs preventing the use of electronic systems are also recognised grounds. Income below £20,000 is not currently in scope.

Dates and deadlines

The phase-in is based on qualifying income, meaning combined gross rental and self-employment income before expenses; employment income, pensions and dividends do not count. From 6 April 2026, landlords with qualifying income above £50,000 in 2024/25 must comply; from 6 April 2027 the threshold drops to £30,000; and from 6 April 2028 to £20,000. The standard quarters end on 5 July, 5 October, 5 January and 5 April, and the quarterly update deadlines fall on the 7th of the following month: 7 August, 7 November, 7 February and 7 May. The final declaration, which replaces the Self Assessment return, is due by 31 January following the tax year end.

On penalties, there is a first-year easement: HMRC is not issuing penalty points for late quarterly updates during 2026/27. It applies to quarterly updates only, not to the final declaration and not to late payment of tax, which remain under the normal regimes. Updates must still be filed during the easement year, because the tax return cannot be submitted until they are.

From 2027/28 the points system applies in full. One point per late submission, and a £200 penalty once you reach four points, with a further £200 for each late submission after that. How points clear depends on where you stand. Below the four-point threshold, each point drops off automatically 24 months after the deadline it relates to. At or above the threshold, automatic expiry stops, and clearing them requires twelve consecutive months of on-time submissions together with every outstanding submission from the previous 24 months. Landlords who volunteered early sit under a lower threshold of two points, though volunteers receive points only for late tax returns rather than late quarterly updates.

How to sign up

Registration for MTD for Income Tax is separate from Self Assessment and is not automatic. You need your UTR, National Insurance number and details of your income sources, and you register through your Government Gateway account via your chosen software rather than on the HMRC website directly; your accountant can register on your behalf.

Use the rental income tax calculator to confirm when your phase starts, and see our guide to registering with HMRC as a landlord for the step-by-step. The next quarterly deadline is 7 November 2026. Get set up before then.

This article is general guidance, not tax advice, and tax rules change. August is one of the platforms reviewed; competitor details, pricing and HMRC recognition statuses were checked in August 2026 and may change, so confirm current plans and recognition on GOV.UK and with each provider. Take advice from a qualified accountant on your circumstances before acting.