The best Making Tax Digital software for landlords, free and paid

Making Tax Digital for Income Tax is a UK-wide HMRC regime, so the same software requirement applies in England, Wales, Scotland and Northern Ireland. The practical choice is between landlord-focused tax software, general accounting software, or a spreadsheet plus bridging software.

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 covers the four in-year submissions and hands you off at year end to an accountant or a finalising tool for the Final Declaration, which is a deliberate scope rather than a gap. Tax-only tools work the other way round: you bring them the numbers. Taxd is the best known, and the NRLA names it as its official tax partner. 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. Xero, FreeAgent, QuickBooks and other Making Tax Digital software may suit landlords who already want full accounting software, but HMRC’s rule is functional compatibility, not a named brand. The NRLA says: “As the NRLA’s official tax partner, Taxd has already helped over 9,000 landlords file their property returns correctly, at a fraction of what an accountant would charge.” The practical question is how much re-keying each quarter costs you: a landlord already running tenancies, rent and compliance in one platform has the MTD data as a by-product, whereas a landlord using a tax-only tool rebuilds it four times a year.

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 a single property 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, you can use Xero for Making Tax Digital as a landlord 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.” 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.” Xero is often the better fit where the landlord already uses full accounting workflows, bank feeds, accountant access, and broader business bookkeeping. A small landlord who only needs property-income reporting may find landlord-specific MTD software simpler than Xero, especially if they do not want a full chart of accounts. 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 August 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
• NRLA, Making Tax Digital is here: here is what landlords need to do next — “As the NRLA's official tax partner, Taxd has already helped over 9,000 landlords file their property returns correctly, at a fraction of what an accountant would charge.” 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