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

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 don't need, or using a tool that does not handle property-specific calculations correctly. This guide explains what makes software MTD-compliant, compares your options across paid and free tiers, covers bridging software for landlords who prefer to keep using spreadsheets, and explains what August offers within this landscape.

What does MTD-compliant software actually mean?

MTD-compliant software, also called MTD-compatible software or HMRC-approved software, must meet three requirements set by HMRC. It must store your digital records of income and expenses. It must submit quarterly updates directly to HMRC via their API, not via a manual login to the government website. And it must support the submission of a final declaration at year end, which replaces your old Self Assessment return. HMRC maintains a list of recognised software providers on GOV.UK, which is the authoritative source for checking whether any product is genuinely approved, HMRC has also recently launched a personalised software finder tool on the same page that returns a shortlist based on your specific income sources and needs. Any software not on that list cannot legally be used for MTD submissions, regardless of how it is marketed.

For landlords specifically, MTD-compliant software should handle property income correctly, meaning it supports the SA105 property income categories, applies Section 24 mortgage interest restrictions (the 20% tax credit rather than a deduction), and ideally tracks income and expenses at property level rather than just in aggregate. The Section 24 point catches many landlords out: 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.

The two types of MTD software for landlords

HMRC distinguishes between two approaches, and understanding them helps you pick the right tool.

Full MTD software keeps your digital records and submits directly to HMRC in one integrated workflow. You log income and expenses throughout the year, the software categorises them using HMRC-aligned categories, and at the end of each quarter you review and submit the update from within the same tool. For landlords, the most important expense categories to verify are: repairs and maintenance, letting agent fees, landlord insurance, mortgage interest, professional fees, and mileage. Our guide to allowable expenses for landlords sets out the complete list with the rules governing each category. This approach is taken by general accounting platforms such as Xero, QuickBooks, Sage, and FreeAgent, as well as landlord-specific platforms including Landlord Vision, Landlord Studio, and August.

MTD bridging software is designed for landlords who want to keep their records in a spreadsheet, typically Excel or Google Sheets, but need a compliant way to submit to HMRC. Bridging software connects your spreadsheet to HMRC's API via a digital link, pulling in figures and submitting them without manual entry into the HMRC portal. Copying and pasting figures from a spreadsheet into the HMRC website does not constitute a digital link and is not compliant under the Income Tax (Digital Requirements) Regulations 2021. Bridging software suits landlords with simple portfolios who are comfortable managing their own records in a spreadsheet. Providers include AbraTax, RentalBux, and AbsoluteTax.

The choice between the two comes down to complexity. If you have one or two properties, straightforward income, and already maintain tidy spreadsheet records, bridging software is a practical and cost-effective route. If you have multiple properties, mixed income sources, or want automated bank feeds and categorisation, full MTD software will save considerably more time across the year.

Is there genuinely free MTD software for landlords?

Yes, though with limitations worth understanding. HMRC itself does not provide free MTD software, unlike the old Self Assessment gateway, there is no government-run free filing service for MTD Income Tax. Several commercial providers do offer free tiers:

• August offers a free tier for landlords with up to 2 tenancies.

• Hammock offers a plan that starts free then becomes £8 per month, covering a limited number of properties with core accounting and MTD submission features. It was among the first landlord-specific platforms to receive HMRC recognition and has strong bank feed integration. The tier suits landlords with one or two properties.

• Clear Books offers a free tier for sole traders and landlords covering digital record-keeping and quarterly MTD updates. It is a general accounting platform rather than a landlord-specific one, so it lacks property management features, but it is a legitimate HMRC-recognised option for straightforward portfolios.

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

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

For most landlords with more than two properties, a paid subscription will be necessary to access the features needed for compliant, efficient quarterly reporting. Pricing across the market typically runs from £6 to £25 per month for dedicated landlord platforms. See August's pricing for a comparison of what is included at each tier.

HMRC-approved software: what the list actually covers

The terms "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 Hammock, Landlord Vision, and Landlord Studio. August has completed the quarterly submission build and is in the final HMRC sign-off stage, with full recognition expected ahead of the relevant phase deadlines.

HMRC recognition confirms a product can submit quarterly updates and final declarations correctly. It does not confirm the product handles property-specific tax calculations accurately. Always verify that any software you choose correctly applies Section 24, the 20% mortgage interest tax credit, rather than treating interest as a directly deductible expense. Our rental income tax calculator applies Section 24 correctly and shows the difference in your tax position if you want to model it.

MTD software for landlords vs general accounting software

General accounting software is well-suited to landlords who also run a self-employed business alongside their rental income, since both income streams can be managed in one platform. Xero and QuickBooks are also the platforms most accountants are familiar with, which simplifies the relationship if your accountant handles quarterly submissions. The drawback is that neither is designed around property management, there is no tenancy tracking, compliance reminders, or document storage for certificates, and property-level income reporting requires manual setup. For a detailed comparison of how dedicated landlord platforms stack up against accounting-first tools, see our best property management software guide.

Why the MTD software question is really a property management question

Most comparison articles treat MTD software as a pure accounting choice. For landlords, this misses the bigger picture. MTD requires clean digital records of rental income and expenses, but those records only stay clean if your rent collection, compliance, and maintenance are also organised. A landlord using separate tools for rent tracking, document storage, compliance reminders, and tax records will spend more time transferring data between systems and has more opportunities for errors to creep in before quarterly submission.

This is the practical case for an integrated platform. August covers the complete property management lifecycle that feeds into your MTD records:

Rent tracking via Open Banking automatically matches incoming payments to the correct tenancy in real time. Every rent payment is recorded as it arrives, with a complete payment history per tenancy available instantly. Partial payments, arrears, and overpayments are all flagged without manual reconciliation. Our guide to Open Banking explains how the technology works and why it produces more accurate records than manual bank statement review.

Expense tracking lets you log and categorise every allowable expense as it arises including repairs, insurance, letting fees, mileage, mortgage interest, and professional fees, using HMRC-aligned categories. Receipts can be photographed in-app and linked to the relevant expense entry. Financial data can be exported to Excel for sharing with your accountant. For a full breakdown of which expenses qualify and how to categorise them for MTD purposes, see our expense categorisation guide.

Compliance management covers gas safety, EICR, EPC, Right to Rent, deposit protection, and HMO and selective licensing, with smart reminders suggested automatically when you upload certificates. When you pay for a gas safety certificate or an electrical inspection, that payment is automatically logged against the property, keeping your expense records and your compliance records in step.

Document storage keeps tenancy agreements, compliance certificates, prescribed information, and correspondence in one place with secure sharing to tenants directly through the August app. AI-powered document scanning reads uploaded tenancy agreements and auto-fills key details, eliminating manual data entry.

Maintenance reporting and management allows tenants to raise issues directly through the app with photos attached. When contractors are paid, the payment is automatically logged against the repair ticket, creating a complete audit trail from report to resolution to expense record.

The result is that your MTD digital records are a natural output of how you run your portfolio day-to-day, rather than something you compile separately at the end of each quarter. For a full comparison of how August's feature set compares with dedicated accounting-first landlord platforms, see August vs Landlord Vision and our best landlord software guide.

Shared ownership and joint landlords under MTD

Under MTD, each co-owner of a property is treated as a separate taxpayer. If you own a property 50/50 with a spouse or partner, each of you reports your share of the income and expenses in your own quarterly updates and must register for MTD individually using your own software. August supports shared ownership, set your ownership percentage when adding a property and August calculates your share of every transaction automatically, including splits that are not 50/50. Both owners can maintain separate accounts while managing the same properties.

MTD for landlords and sole traders

Many landlords also have self-employment income alongside rental income. Under MTD, both streams are in scope and you must submit quarterly updates for each separately, up to eight submissions per tax year if both are active. Your software must support both SA105 (property income) and SA103 (self-employment income) categories. Not all landlord-specific platforms cover self-employment income, so confirm this explicitly before committing if it applies to you. The rental income tax calculator accounts for both income sources when estimating your qualifying income and indicative start date.

Making tax digital exemptions: who does not need to comply?

Properties held within a limited company are outside scope entirely, MTD for Income Tax applies only to individual unincorporated landlords. Partnerships are currently exempt, though individual partners with separate rental income may still be in scope personally. Ministers of religion and Lloyd's underwriters are exempt for the current Parliament.

Landlords who cannot reasonably use digital tools due to age, disability, or remote location may apply to HMRC for a digital exclusion exemption, this must be applied for and is not granted automatically. Religious beliefs preventing the use of electronic systems are also recognised grounds. Income below £20,000 is not currently in scope, though HMRC may lower the threshold further.

Making tax digital dates and deadlines

The phase-in schedule is based on qualifying gross income, 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. From 6 April 2028 it drops to £20,000. Quarterly updates are due within one month of each quarter end: 5 August, 5 November, 5 February, and 5 May. The final declaration is due by 31 January following the tax year end. HMRC is not imposing penalties for late quarterly submissions in the first year (2026/27) to allow landlords time to adjust, but submissions are still required.

How to sign up for MTD

Registration for MTD for Income Tax is separate from Self Assessment and is not automatic. You need your UTR number, National Insurance number, and details of your income sources. Registration is completed through your Government Gateway account via your chosen software, not on the HMRC website directly. Your accountant can register on your behalf if preferred. Use the rental income tax calculator to confirm when your phase starts, and read our complete guide to registering with HMRC as a landlord for the full step-by-step process including UTR numbers and what to do if you miss a deadline.

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 · Rental income tax calculator · Expense categorisation guide · Rent tracking feature · Expenses feature · Compliance feature · Open Banking guide · Best landlord software 2026 · August vs Landlord Vision · Landlord accounting