MTD software shopping feels like buying a car when you just need to get to work.
Digital links. Automatic categorisation. Bank feed integration. Receipt capture. You're not sure which features you actually need and which ones are just expensive add-ons.
Meanwhile, the clock's ticking. April 2026 isn't far off.
Get this wrong and you'll face penalties or pay someone to sort it out. Get it right and you'll forget MTD even exists.
This guide tested 38 MTD software options. You'll learn what features matter for self employed and landlords, what's just marketing fluff, and which providers are worth trusting.
What is Making Tax Digital (MTD)?
Making Tax Digital is HMRC's initiative to modernise the UK tax system through mandatory digital record keeping and reporting. Instead of submitting one annual tax return, businesses and landlords now report income and expenses to HMRC throughout the year using approved software.
HMRC launched MTD in phases.
MTD for VAT came first in 2019, affecting VAT-registered businesses.
MTD for Income Tax Self-Assessment (known as MTD ITSA) follows from April 2026, targeting self-employed individuals and landlords.
The government's stated goal is reducing the tax gap. That's the £36 billion annual difference between tax owed and tax collected. Real-time digital reporting theoretically catches errors earlier and makes tax evasion harder.
For you, MTD means abandoning paper records and spreadsheets. Every business transaction must be logged in software that connects digitally to HMRC's systems. Manual data entry into HMRC's online portal won't meet the requirements.
Who Needs to Comply with MTD and When?
MTD for VAT: Who and When
If you're VAT-registered with taxable turnover above £85,000, you've been using MTD for VAT since April 2022. This requirement is already in force and non-negotiable.
Businesses below the VAT threshold can register voluntarily but aren't required to comply with MTD for VAT. However, if your turnover crosses £85,000, you must register for VAT and immediately comply with MTD requirements.
MTD for Income Tax (ITSA): Who and When
MTD ITSA applies to self-employed individuals and landlords based on their qualifying income. The rollout happens in three phases across 2026, 2027, and 2028.
From April 2026, anyone with qualifying income above £50,000 must comply.
From April 2027, the threshold drops to £30,000.
From April 2028, it drops again to £20,000.
HMRC hasn't announced plans for those with qualifying income below £20,000. The current focus remains on higher earners who collectively represent the bulk of self-employment and property income.
Understanding Qualifying Income: What Counts and What Doesn't
Qualifying income for MTD compliance is your gross income from self-employment and property before deducting any expenses. HMRC adds up your sole trader turnover, UK property rental income, and foreign property rental income to determine if you're above the threshold.
Your employment salary doesn't count. Neither do pensions, dividends, bank interest, or capital gains. These income types fall outside MTD ITSA even though you'll still report them in your year-end tax return.
If you're VAT-registered and include VAT in your Self-Assessment return figures, that VAT counts toward your qualifying income. If you exclude VAT from your return, it doesn't count. The key is what you actually report to HMRC on your Self-Assessment.
HMRC determines your qualifying income by looking at your most recent filed tax return. For the April 2026 start, they'll check your 2024/25 return due by 31 January 2026. If that return shows qualifying income above £50,000, you're mandated into MTD from April 2026.
Joint property owners are assessed individually. Two spouses jointly owning a property generating £60,000 annual rent each have £30,000 qualifying income, not £60,000. Each owner compares their share against the thresholds separately.
The Three Core Requirements of MTD Compliance
Digital Record Keeping
You must maintain digital records of all business income and expenses using MTD-compatible software. Paper records alone no longer satisfy HMRC's requirements, even if you later transcribe them digitally.
Your digital records must capture three elements for every transaction:
the amount,
the date, and
the category
Categories follow the same structure as Self-Assessment return boxes, so rental income, mortgage interest, and letting fees each get their own classification.
The software you choose can be specialist accounting platforms, basic bookkeeping apps, or even spreadsheets. But spreadsheets come with a catch: you'll need additional bridging software to connect them to HMRC's systems for submission.
Quarterly Updates to HMRC
Four times per year, you'll submit summary updates of your income and expenses directly from your software to HMRC. These aren't full tax returns but streamlined reports showing your business performance for that period.
Quarterly updates are cumulative.
Your first update covers April to July.
Your second covers April to October.
Your third covers April to January.
Your fourth covers the full tax year April to April.
If you discover an error in a previous quarter, you don't resubmit that quarter. You simply correct it in your next quarterly update. The cumulative structure allows for ongoing adjustments without complex amendment procedures.
Standard quarterly periods align with the tax year, with deadlines falling on the 7th of the month after each quarter ends. You can alternatively elect to use calendar quarters if that better suits your accounting cycle, though the submission deadlines remain the same.
Year-End Tax Return Submission
After your fourth quarterly update, you'll file a final MTD tax return by 31 January following the tax year. This return pulls data automatically from your four quarterly updates, so most figures pre-populate.
The year-end return is where you make accounting adjustments, add non-business income sources, and claim tax reliefs. It mirrors the current Self-Assessment return but with significantly less manual data entry.
This final return must come from MTD-compatible software. HMRC won't provide an online portal for MTD participants to file manually. If your software only handles quarterly updates but not the final return, you'll need additional software or an accountant to complete the year-end submission.
Why You Need MTD-Compliant Software
These three requirements of MTD create a legal obligation to use approved software. Manual methods simply cannot meet HMRC's technical specifications for digital record keeping and submission.
The digital links requirement is particularly strict. Every data transfer from record creation to HMRC submission must happen through automated digital connections. Copying figures from one system and pasting them into another breaks the digital link and violates MTD rules.
Attempting to comply without proper software means facing penalty points for inadequate record keeping. HMRC can levy up to £3,000 per failure to maintain digital records or digital links. These penalties apply whether you miss deadlines or maintain non-compliant records.
Software isn't optional anymore. It's the only legally compliant way to meet MTD requirements. The question isn't whether to use software but which software to choose.
What Makes MTD Software 'Good'? The Essential Features
Not all MTD software is created equal. HMRC recognition means the software meets minimum technical standards for connecting to their systems. It doesn't mean the software is actually good to use.
HMRC Recognition for Your Income Types: Software might be recognised for self-employment but not property income, or UK property but not foreign property. Verify the software explicitly supports every income type you have. Buying software that only covers half your income sources forces you into using multiple platforms.
Automatic Bank Feed Integration: Manually typing every transaction defeats the purpose of digital record keeping. Bank feeds import transactions automatically, saving hours of data entry. Better software includes AI-powered categorisation that learns your patterns and suggests the correct expense category for each transaction.
Mobile Receipt Capture: Snap a photo of receipts using your phone and attach them to transactions. OCR technology extracts key details like date, amount, and supplier. This eliminates the shoebox of paper receipts and creates a complete audit trail HMRC expects.
Quarterly Update Automation: The software should generate quarterly updates from your records with minimal manual input. One-click submission to HMRC is the standard. Avoid software requiring you to manually compile update figures from your records.
Year-End Tax Return Capability: Some software handles quarterly updates but not the final tax return. You'll then need bridging software or an accountant for year-end filing. All-in-one solutions manage the complete MTD cycle from records to final submission.
Joint Ownership Handling: If you own property with others, the software must accommodate profit-sharing arrangements. Basic software assumes 50/50 splits. Advanced software lets you set custom ratios like 60/40 or 70/30 where profits don't match legal ownership percentages.
Additionally, look for accountant portal access for sharing records with your tax advisor, automated deadline reminders so you never miss submission dates, and comprehensive financial reporting beyond basic MTD compliance. Features like invoice creation, expense claim tracking, and payroll integration become valuable as your business grows.
Our Testing Methodology: How We Evaluated 38+ MTD Solutions
We created a testing framework covering every aspect of MTD compliance that matters to landlords and sole traders. Our evaluation wasn't based on marketing claims but hands-on testing of actual software functionality.
Each software underwent the same assessment process. We
created test accounts,
connected sample bank feeds,
logged fictional income and expenses,
submitted test quarterly updates to HMRC's sandbox environment, and
evaluated the year-end return process.
We tested 27 fully available software solutions and reviewed 11 platforms currently in development. Our evaluation criteria included income type support, pricing transparency, ease of use for non-accountants, property management features, joint ownership capabilities, and mobile app functionality.
We paid particular attention to the landlord experience. Generic accounting software often treats property rental as just another business type. We wanted software understanding landlord-specific needs like mortgage interest restrictions, jointly owned properties, and multiple property portfolio management.
The testing revealed significant gaps in the market. Most software excels at either property management or accounting, rarely both. Expensive solutions offer comprehensive features but cost more than many small landlords can justify. Cheap or free options sacrifice crucial functionality.
The Top 5 MTD Software for Self Employed
1. RentalBux: Best Overall for Landlords & Sole Traders
RentalBux emerged as our top choice because it's the only software built from the ground up as a complete property business management platform with full MTD compliance. Where competitors bolt property features onto accounting software or vice versa, RentalBux integrates everything natively.
Key Features:
HMRC-recognised for all three income types: UK property, foreign property, and self-employment
Full property management including tenancy tracking, mortgage recording, and rent automation
Ledger mapping feature that connects your chart of accounts directly to Self-Assessment return boxes
AI-powered bank feed categorisation that learns your transaction patterns
Handles complex joint ownership with custom profit-sharing ratios
Pricing: Completely free for landlords with one property until March 2028. Paid plans start at £6/month for 1-3 properties or businesses. Monthly and annual billing available, with 25% savings on annual plans.
2. Hammock: Best for Landlords Only
Hammock built their software specifically for landlords and property investors. If you have no self-employment income, Hammock delivers property-focused features competitors can't match.
Key Features:
Handles all ownership structures including joint ownership, partnerships, and limited companies
Suitable for all tenancy types: standard AST, HMO, furnished holiday lets, student lettings
Compatible with personal bank feeds while excluding personal transactions
Automated notifications for important dates like lease renewals or safety certificate expirations
Pricing: £57/year for 1-3 properties (includes 20% discount until April 2026), £115/year for 4-10 properties, £191.90/year for 11-20 properties. All prices exclude VAT. 30-day free trial available.
3. @Coconut: Best All-Rounder for Mixed Income
Coconut supports all three qualifying income types in one platform: self-employment, UK property, and foreign property. It's the Swiss Army knife of MTD software without the complexity of enterprise platforms.
Key Features:
Connect accounts from 30+ banks and credit cards simultaneously
Receipt scanner app that captures and categorises expenses on the go
Unlimited branded invoice creation and tracking
Real-time accountant portal for sharing records with your tax advisor
Pricing: £9.95/month or £99/year. Free for two years if you open a Zempler bank account. 30-day free trial available.
4. QuickBooks: Best for Established Businesses
QuickBooks brings enterprise-grade features to small businesses. It's overkill if you have one rental property, but perfect if you're running a substantial business alongside property income.
Key Features:
Advanced reporting and analytics with Excel sync capability
Manages income and expenses using AI-powered categorisation
Supports 145+ currencies for international landlords
Collaborative features letting multiple team members access real-time data
VAT error checker and deadline reminders
Pricing: Sole trader plan at £5/month, scaling up to Advanced at £57.50/month. Prices reflect 50% discount for the life of subscription and exclude VAT.
5. FreeAgent: Best for Bank Account Integration
FreeAgent offers seamless integration if you bank with NatWest, Royal Bank of Scotland, Ulster Bank, or hold a Metle account. Make at least one transaction monthly and the software becomes completely free.
Key Features:
Completely free for qualifying bank account holders with monthly activity
Smart bill capture tool for digitising receipts and invoices
Dedicated pricing tiers for different business structures (sole trader, partnership, limited company, landlord)
UK-based support accountants available by phone or online chat
Pricing: Free with qualifying bank accounts, otherwise £5/month for landlords (£50/year) or £9.50/month for sole traders (£95/year), with 50% discount for first six months. All prices exclude VAT.
Why RentalBux Stands Out: The Complete Solution
Built by Property Tax Specialists, Not Generic Software Companies
UK Property Accountants, one of the UK's leading specialist accountancy firms, developed RentalBux. They serve over 8000 property investors and handle MTD compliance for hundreds of clients annually.
Every feature reflects real problems their accountants encountered.
Clients couldn't find software handling 60/40 profit splits between spouses.
Clients struggled with multiple properties each having different mortgage structures.
Clients wanted property management without paying for separate software.
The development team includes practising accountants who understand both the technical MTD requirements and the practical realities of managing rental properties. This isn't software built by Silicon Valley developers guessing what landlords need.
The Only True 3-in-1 Platform
Most MTD software forces you to choose:
property management or accounting,
landlord features or sole trader features,
simple or comprehensive.
RentalBux eliminates these false choices.
The property management module tracks tenancy details, lease terms, safety certificates, and rent collection. Set automated reminders for lease renewals or mortgage rate reviews. Upload digital copies of tenancy agreements and insurance documents to secure cloud storage.
The accounting module provides full bookkeeping functionality: bank feed integration, invoice creation, expense tracking, and financial reporting. It's not simplified accounting for small businesses but complete double-entry bookkeeping that satisfies both HMRC and serious business analysis.
The MTD compliance module handles digital record keeping, quarterly updates, and year-end returns for all three income types. Whether you have UK property, foreign property, self-employment income, or all three, RentalBux manages everything in one place.
Pricing That Makes Sense for Your Portfolio Size
The free tier for single-property landlords until March 2028 is industry-leading. That's free MTD compliance, free accounting, and free property management for over two years during the critical MTD rollout period.
When you expand beyond one property, pricing scales proportionally. One to three properties costs £6-9 monthly depending on features needed. Four to ten properties costs £12-18 monthly. Eleven to twenty properties costs £20-30 monthly.
Compare this to competitors:
Hammock charges £57 yearly (£4.75 monthly) but lacks accounting features and self-employment support.
QuickBooks starts at £60 monthly (after discounts end) but offers minimal property management.
FreeAgent costs £60 yearly for landlords but doesn't support foreign property.
RentalBux delivers more functionality at competitive or lower pricing. The all-in-one approach eliminates costs of multiple software subscriptions or accountant fees for bridging gaps between platforms.
Complex Ownership Structures? No Problem
Standard software assumes you own properties outright or in simple 50/50 partnerships. Reality is messier.
You might own 50% of a property legally but agreed to take 70% of profits due to your larger deposit contribution. Three siblings might own a property equally but one manages it and receives a larger profit share for their time. Spouses might own multiple properties with different ownership percentages on each.
RentalBux lets you set individual ownership structures and profit-sharing ratios for each property in your portfolio. The system automatically calculates each owner's share of income and expenses. When quarterly update time arrives, each owner sees only their portion without manual calculations.
This granular control extends to the year-end return. The software knows which income and expenses belong to which owner and populates the correct boxes on each person's Self-Assessment return. No spreadsheet calculations. No risk of reporting the wrong figures.
Automation That Actually Saves Time
Ledger mapping is RentalBux's secret weapon. This feature connects your chart of accounts to specific boxes on the Self-Assessment tax return.
You configure it once during setup.
Mortgage interest automatically routes to the residential finance costs box.
Rental income flows to the UK property income box.
Letting agent fees land in professional fees. All automatic after initial configuration.
The AI-powered bank feed categorisation learns your transaction patterns. That monthly payment to your letting agent? Categorised as management fees. The transfer from your tenant? Rental income. The purchase from the plumbers' merchant? Repairs and maintenance.
You review and approve the suggestions. Over time, the system requires progressively less manual input as the AI becomes more confident in its categorisations.
Which Software Should You Choose?
If you're a landlord with one property and no other business income, start with RentalBux's free tier. You'll get complete MTD compliance and property management at zero cost until March 2028. By then, you'll understand if the platform meets your needs.
If you only have rental properties and already bank with NatWest, Royal Bank of Scotland, Ulster Bank, or use Metle, FreeAgent makes sense. The free software with qualifying accounts is hard to beat, though you'll miss property-specific features.
If you have both rental property and self-employment income, the choice narrows significantly. Most software handles one or the other well, rarely both. RentalBux and @Coconut are your primary options, with RentalBux offering substantially more property management features.
If you own foreign property alongside UK property or self-employment income, verify your chosen software explicitly supports foreign property. Many solutions skip this income type. RentalBux, @Coconut, and a handful of others cover foreign property properly. RentalBux delivers full property management, complete accounting, and MTD compliance across all income types at lower cost. @Coconut handles compliance but lacks property tools
Conclusion
MTD compliance starts April 2026. No exceptions.
You've got 38+ options, and most do one thing well while failing at everything else. RentalBux covers it all: property management, accounting, and MTD compliance in one platform. Built by tax specialists who understand rental property.
Start now, not during the April 2026 panic. Get your properties set up. Log some transactions. Learn how it works.
When August 2026 arrives, you'll submit in two clicks while your competitors are still Googling "MTD software."
Frequently Asked Questions (FAQs)
You can use spreadsheets for keeping digital records, but you'll need bridging software to connect them to HMRC's systems. Bridging software creates the required digital link between your spreadsheets and HMRC for submissions. Most landlords find all-in-one solutions simpler.
Your software must maintain digital records of all business income and expenses throughout the year, not just submit returns. Software that only handles submissions won't meet HMRC's digital record keeping requirements.
Not necessarily. Check with your provider to confirm it's HMRC-recognised specifically for MTD ITSA. Software handling traditional Self-Assessment doesn't automatically support MTD's quarterly updates and digital links requirements.
Some software supports multiple income types, but many specialise in either property or self-employment, not both. Verify the software explicitly supports all your income sources before purchasing.
You'll need multiple software platforms with separate quarterly updates from each system. This creates extra admin work, higher costs, and increased risk of errors when consolidating for your year-end return.