MTD Software for Landlords UK: Which to Choose

If you are a landlord in the UK with property income above £50,000, Making Tax Digital for Income Tax is now your reality. From April 2026, you must keep digital records and submit quarterly updates to HMRC using compatible software. The threshold drops to £30,000 from April 2027.

But here is the challenge: most MTD software is designed with general small businesses or freelancers in mind. Landlords have specific needs — rental income tracking, property expenses, mortgage interest calculations, and sometimes multiple properties to manage. Not every tool handles these well.

This guide helps you choose the right MTD software for your property business.

What Landlords Need From MTD Software

Before looking at specific products, let's be clear about what a landlord actually needs:

1. Property Income Tracking

You need to record rental income from each property (or a portfolio) on a regular basis. If you have multiple properties, you want to be able to track income by property or at least see a clear breakdown.

2. Property Expense Categories

Landlord expenses are different from typical business expenses. You need categories for: - Mortgage interest (remembering the finance cost restriction that limits tax relief to basic rate) - Repairs and maintenance - Letting agent fees - Insurance (landlord/buildings/contents) - Ground rent and service charges - Council tax (if paid by you rather than the tenant) - Utilities (if included in the rent) - Legal and professional fees - Travel to properties for inspections or maintenance

3. Quarterly Submissions

The software must be able to generate and submit quarterly updates to HMRC via their MTD API. This is non-negotiable — it is the core legal requirement.

4. Handling Multiple Properties

Many landlords own more than one property. You need software that can handle this without making the record keeping unnecessarily complicated.

5. End of Period Statement and Final Declaration

After the four quarterly updates, you need to submit an End of Period Statement (finalising your property income for the year) and a Final Declaration (confirming your overall tax position, including any other income sources).

Software Options for Landlords

ClearMTD

ClearMTD is designed for MTD for Income Tax compliance, supporting both sole traders and landlords. It handles property income and expenses, quarterly submissions, and the annual declaration process.

Why landlords like it: - Simple to set up — no accounting background needed - Property expense categories built in - Affordable compared to full accounting platforms - Focused on what HMRC actually requires, without unnecessary complexity

Considerations: - Not a full property management tool — it handles MTD compliance, not tenant management or rent collection

Try ClearMTD for free

Xero

Xero is a full accounting platform that supports MTD for Income Tax. It can handle property income alongside other business income.

Why landlords like it: - Comprehensive reporting and bank reconciliation - Can manage complex financial situations (e.g., multiple income sources) - Large integration ecosystem

Considerations: - Expensive for landlords with straightforward affairs (from ~£15-30/month) - Steep learning curve — designed for businesses and accountants - Property-specific features are not its primary focus

QuickBooks

QuickBooks offers MTD for Income Tax support and can be configured for property income tracking.

Why landlords like it: - Established brand with strong support - Good mobile app - Bank feed integration

Considerations: - Pricing has increased over the years - Setting up for property income may require some configuration - More features than most landlords need

FreeAgent

FreeAgent supports MTD for Income Tax and has a UK-focused approach to tax. Free for NatWest/RBS business account holders.

Why landlords like it: - UK tax timeline feature shows estimated liability - Free with NatWest/RBS business banking - Designed for UK tax rules

Considerations: - Property income tracking is not its strongest area — primarily designed for freelancers - Monthly cost if you are not a NatWest/RBS customer

HMRC Free Tool

HMRC provides a basic free tool for MTD for Income Tax submissions.

Why landlords might consider it: - Completely free - Guaranteed HMRC compatibility

Considerations: - Very limited functionality - No bank feeds or automation - May struggle with multiple properties - Minimal support

Choosing the Right Option: A Decision Framework

If You Have 1-3 Properties With Straightforward Finances

You do not need a full accounting suite. A dedicated MTD tool like ClearMTD will handle your quarterly reporting without overcomplicating things. Record your rent received, log your expenses, submit your updates — done.

If You Have a Large Portfolio (10+ Properties)

Consider a more comprehensive tool like Xero or QuickBooks, especially if you already use property management software that integrates with them. The reporting and bank feed features become more valuable at scale.

If You Have Property AND Self-Employment Income

Your combined income from both sources determines whether you exceed the £50,000 threshold. You need software that can handle both property and self-employment income within the same MTD submission. ClearMTD supports this dual-income scenario.

If You Use a Letting Agent

Many landlords receive monthly statements from their letting agent showing rent received minus agent fees. Your software needs to handle this properly — recording the gross rent as income and the agent fee as an expense, not just the net amount. Most MTD software supports this, but check before committing.

Key Considerations for Landlords

Mortgage Interest and the Finance Cost Restriction

Since April 2020, landlords can no longer deduct mortgage interest as an expense in full. Instead, you receive a basic rate (20%) tax credit for your finance costs. Your MTD software needs to handle this correctly — recording mortgage interest separately so it can be treated properly in your tax calculations.

Capital vs Revenue Expenses

Replacing a broken boiler is a revenue expense (deductible). Installing a brand new central heating system in a property that never had one is a capital expense (not deductible as a running cost, though capital allowances may apply). Your software should allow you to categorise these correctly.

Furnished vs Unfurnished Properties

If you let furnished properties, you may be able to claim the Replacement of Domestic Items Relief for replacing furniture, appliances, and furnishings. Your software should support tracking these costs separately.

The £1,000 Property Allowance

If your gross property income is under £1,000, you can use the property allowance and do not need to report it. If your income is above this (which it almost certainly is if you are a landlord within MTD), the allowance does not apply.

Getting Started as a Landlord

The process for landlords is the same as for sole traders under MTD:

  1. Register for MTD for Income Tax with HMRC via your Government Gateway account
  2. Choose compatible software — one that handles property income properly
  3. Set up your properties in the software and begin recording income and expenses
  4. Submit quarterly updates within one month of each quarter ending
  5. File your End of Period Statement and Final Declaration by 31 January

For more detail on the quarterly process, see our guide on HMRC quarterly reporting.

If you are not sure whether MTD applies to you based on your income, our quick guide on whether you need MTD software can help.

ClearMTD makes MTD compliance straightforward for landlords. Record your rental income, log your property expenses, and submit your quarterly updates — all without needing an accounting degree. Sign up for free and get compliant today.

Frequently Asked Questions

Does MTD apply to me if I only have one rental property?

It depends on your total qualifying income. If the rent from your property (combined with any self-employment income) exceeds £50,000 gross, you must comply from April 2026. The number of properties does not matter — it is the total income that counts.

Can I use different software for my property income and self-employment income?

In theory, yes — you can use different software for different income sources. However, it is simpler to use one tool that handles both, as your Final Declaration needs to bring everything together.

Do I need to submit separate quarterly updates for each property?

No. Your quarterly update covers all your property income combined. You do not submit separate returns for each property — you report your total property income and total property expenses for the quarter.

What if I have joint ownership of a property?

If you jointly own a rental property (for example, with a spouse), you each report your share of the income and expenses. If you own 50/50, you each report half. Each owner needs their own MTD software and submits their own quarterly updates.

Do I need to report capital gains through MTD?

No. MTD for Income Tax covers your rental income (revenue), not capital gains from selling properties. Capital gains from property sales are reported separately. However, you should keep records of capital expenditure on your properties for when you eventually sell.