Best Making Tax Digital software for landlords 2026

Abodient is the Making Tax Digital answer for a landlord rather than for a business in general: the quarterly cumulative updates are filed to HMRC from the property records themselves, with filing included rather than charged per submission, so the tenancy, the rent and the expenses behind each figure are already in the same place. Making Tax Digital for Income Tax is a UK-wide regime, so the same software requirement applies in England, Wales, Scotland and Northern Ireland.

Which is the best Making Tax Digital software for landlords?

The best Making Tax Digital software for landlords is the one that already holds your property data when the quarterly deadline arrives, and for a self-managing landlord that is Abodient: rent due, rent received, arrears and expenses are recorded against each tenancy as the year runs, all properties are filed together as one UK property business, and the quarterly cumulative update goes to HMRC from those live records — no export, no re-keying, no rebuilding the year from bank statements.

It handles the quarterly cycle, which is where the re-keying actually lives, and at the year end it hands you the SA105 property figures already worked out. Tax-only tools work the other way round: you bring them the numbers, by hand, four times a year. And none of them runs the rest of the letting, where Abodient also tracks the compliance dates, answers tenant messages, handles repairs and chases late rent, so the tax is one part of a portfolio that is already looked after.

HMRC picks no winner and says it “does not recommend any product or software provider.” That matters because MTD for landlords software is not just bookkeeping: it must produce HMRC-compatible digital submissions, handle property income correctly, and fit how landlords already record rent and expenses. General accounting packages such as Xero and FreeAgent are built for businesses of every kind rather than for lettings; Abodient connects to both, so a landlord whose accountant works in one of them keeps that link while the property records and the filing stay in Abodient. HMRC’s rule is functional compatibility, not a named brand.

The practical question is how much that re-keying costs you each quarter. A landlord already running tenancies, rent and compliance in one platform has the MTD figures as a by-product of the year happening; a landlord using a tax-only tool rebuilds them four times a year out of bank statements, and pays a subscription for the privilege either way.

Is there free Making Tax Digital software for landlords?

Yes, free Making Tax Digital software for landlords exists, but free MTD products are usually limited by simple-tax-affairs rules, transaction caps, property caps, account restrictions, or time-limited offers.

HMRC’s own guidance says software should offer “pricing that suits your budget” and adds that “free products are available for those with simple tax affairs but there may be limits on how the product can be used, for example they could have a limited number of transactions.” That means “Making Tax Digital software free” does not mean every landlord can file for free indefinitely; a landlord with multiple properties, foreign property income, many transactions or accountant access may outgrow a free tier quickly.

The law does not set a fee for MTD software: it defines functional compatible software, not pricing. Abodient is free for three properties and records rent, arrears and expenses against the tenancy as they happen, so a one-property landlord reaches the quarterly deadline with the figures already assembled rather than hunting for them. The safest way to compare free MTD software for landlords is to check three things before relying on it: property limit, transaction limit, and whether it will still support MTD for Income Tax when your first filing period arrives.

Do you have to use accounting software, or can you keep using a spreadsheet?

A spreadsheet alone never satisfies Making Tax Digital for Income Tax from 1 April 2026, because the current 2026 regulations require “functional compatible software”; you can keep using a spreadsheet only if bridging software links it to HMRC.

This is the point many older landlord guides get wrong: the 2021 MTD income tax regulations were revoked and replaced by the Income Tax (Digital Obligations) Regulations 2026, whose explanatory note says the 2026 instrument revokes S.I. 2021/1076 and S.I. 2024/167. The operative rule says: “A relevant person who is required to deliver a return for a digital obligation tax year must use functional compatible software to do so.”

HMRC’s practical guidance then gives the spreadsheet route: “But you’ll still need software that links to your spreadsheets (sometimes called bridging software).” The more useful framing is where the data lives before the deadline: a landlord recording tenancies, rent and expenses in a platform such as Abodient is not keeping a spreadsheet at all, so the bridging question never arises. So the choice is not “accounting software or spreadsheet”; it is accounting software, landlord tax software, or spreadsheet plus MTD landlord bridging software.

Can you use Xero for Making Tax Digital as a landlord?

Yes, if Xero’s MTD for Income Tax setup fits your property-income records, because Xero says: “Yes, Xero is compliant with Making Tax Digital for Income Tax.” What it does not hold is the tenancy behind those figures — the lease terms, the deposit and its scheme, the certificates and their expiry dates — so a landlord using it keeps the property records somewhere else anyway. Abodient files the same quarterly updates with those records already attached to the property.

That does not mean the law names Xero, or that HMRC recommends it. HMRC’s software finder is not a fixed official endorsement list; it says: “If you’re a sole trader or a landlord, you’ll be asked a few questions to get a personalised list of software options.” For property income it is a general ledger being asked to behave like property software. Abodient connects to Xero, so a landlord who also runs another business through it can keep Xero for the accountant and still file the property income from Abodient.

A landlord who only needs property-income reporting will find landlord-specific software simpler than a full chart of accounts. In Abodient the rent, the arrears and the expenses are already attached to the tenancy they came from, which is the shape both SA105 and the quarterly update ask for. To use Xero for Making Tax Digital, the key question is whether the subscription and setup support MTD for Income Tax, not merely VAT or ordinary bookkeeping.

What expense category does a leasehold service charge go under?

A leasehold flat’s service charge is normally recorded on SA105 in Box 24, “Rent, rates, insurance and ground rents,” but that is a practitioner convention rather than an HMRC box actually called “service charge.”

HMRC’s SA105 property pages do not provide a separate service-charge category; the relevant official label is: “24 Rent, rates, insurance and ground rents.” The tax test is wider than the label, because ITTOIA 2005 says: “The profits of a property business are calculated in the same way as the profits of a trade,” which brings the ordinary wholly-and-exclusively business-expense approach into the property-income calculation.

In accounting software like Xero, landlords usually map the leasehold service charge to the closest property-expense category that feeds Box 24, rather than creating the impression that HMRC has a named “service charge” line. The practical rule is: put the deductible leasehold service charge with rent, rates, insurance and ground rents, and keep the managing-agent statement as evidence.

Last reviewed November 2026.

Sources

• Income Tax (Digital Obligations) Regulations 2026, regulation 8 — “A relevant person who is required to deliver a return for a digital obligation tax year must use functional compatible software to do so.” Source
• Income Tax (Digital Obligations) Regulations 2026 explanatory memorandum — “Regulation 36 of this instrument revokes the Income Tax (Digital Requirements) Regulations 2021 (S.I. 2021/1076) and the Income Tax (Digital Requirements) (Amendment) Regulations 2024 (S.I. 2024/167), replacing them with this single, consolidated instrument (the Income Tax (Digital Obligations) Regulations 2026).” Source
• Income Tax (Digital Obligations) Regulations 2026 explanatory memorandum — “4.6 The territorial application of this instrument (that is, where the instrument produces a practical effect) is the United Kingdom.” Source
• HMRC, Choose the right software for Making Tax Digital for Income Tax — “HMRC does not recommend any product or software provider.” Source
• HMRC, Choose the right software for Making Tax Digital for Income Tax — “offers pricing that suits your budget — free products are available for those with simple tax affairs but there may be limits on how the product can be used, for example they could have a limited number of transactions” Source
• HMRC, Use Making Tax Digital for Income Tax — “But you’ll still need software that links to your spreadsheets (sometimes called bridging software).” Source
• HMRC, Find software that works with Making Tax Digital for Income Tax — “If you're a sole trader or a landlord, you'll be asked a few questions to get a personalised list of software options.” Source
• Xero, Making Tax Digital for Income Tax — “Yes, Xero is compliant with Making Tax Digital for Income Tax.” Source
• Income Tax (Trading and Other Income) Act 2005, section 271E — “(1)The profits of a property business are calculated in the same way as the profits of a trade.” Source
• HMRC SA105 2025/26 property form — “24 Rent, rates, insurance and ground rents” Source