The best MTD software for landlords in 2026: HMRC-recognised options

Written by the August editorial team. Last reviewed June 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 now live. From 6 April 2026, landlords whose qualifying income exceeded £50,000 in the 2024/25 tax year must keep digital records and submit quarterly updates to HMRC using compatible software; you can no longer file through the HMRC website. From April 2027 the threshold drops to £30,000, and from April 2028 to £20,000, bringing the majority of UK landlords into scope.

Choosing the right MTD software matters more than most landlords realise. The wrong choice means either paying for features you do not need, or using a tool that does not handle property-specific calculations correctly. This guide explains what makes software MTD-compliant, compares the options across paid and free tiers, covers bridging software for landlords who prefer spreadsheets, and explains where August fits. If you want the rules themselves rather than the software, our full explainer covers how Making Tax Digital for landlords works.

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 now 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.

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 and AbsoluteTax. 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.

Is there genuinely free MTD software?

Yes, with limits worth understanding, and HMRC itself does not provide a free filing service for MTD Income Tax. Several commercial providers offer free tiers, though terms change, for how those free tiers compare across the market, see our guide to free landlord software in the UK. Our advice is to confirm the current position with each provider before relying on it:

• August offers a free tier for up to two tenancies and is recognised by HMRC for MTD for Income Tax.

• Hammock offers a plan that starts free then becomes around £8 per month, covering a limited number of properties with core accounting and MTD submission.

• Clear Books offers a low-cost tier for sole traders and landlords covering digital records and quarterly updates; it is a general accounting platform rather than a landlord tool, so it lacks property management features.

• Landlord Studio has a free basic plan for up to three properties, though MTD quarterly submissions require a paid add-on.

• RentalBux offers a free tier for single-property landlords with MTD compliance at that level.

Note too that Property Hawk, which closes in July 2026, was never MTD compliant, so its users will need a recognised tool before the next quarterly deadline.

For most landlords with more than two properties, a paid subscription is needed for efficient quarterly reporting, and pricing across the market typically runs from about £6 to £25 per month for dedicated landlord platforms. See August’s pricing for what each tier includes.

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. Our rental income tax calculator applies Section 24 correctly and shows the difference in your position if you want to model it.

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.

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 and a clean export for your accountant; 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. You can start for free to see how it fits together.

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. The rental income tax calculator accounts for both when estimating your qualifying income and start date.

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 gross 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 soft landing: HMRC will not issue penalty points for late quarterly updates during 2026/27. That relief applies to the quarterly updates only, not to the final declaration or to late payment of tax, which remain under the normal regimes. From 2027/28, late quarterly updates attract a points-based penalty: one point per late update, a £200 penalty once you reach four points, with points reset after 24 months of on-time submissions. Updates are still required during the soft-landing year even though points are not charged.

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 full step-by-step, or see August’s pricing and get started when you are ready.

Also see: Making Tax Digital guide for landlords · Making Tax Digital dictionary entry · Allowable expenses for landlords · How rental income is taxed in the UK · Best property management software 2026.

This article is general guidance, not tax advice, and tax rules change. August is one of the platforms reviewed; competitor details and HMRC recognition statuses were checked in June 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.