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HM Revenue & Customs (HMRC) is sending almost a million letters to property professionals earning £50,000 or more, reminding them of a new income tax reporting system starting on 6 April 2026.
The letters are being issued in two batches: one sent in February and the second due to follow in March.
Under Making Tax Digital for Income Tax (MTD), landlords must sign up for the service and submit quarterly income updates using compatible software.
Below, we explain what MTD software needs to do, how it works, and how landlords can choose a suitable product.
HMRC requires landlords to use record-keeping software that connects to the online Making Tax Digital system to:
Although MTD currently applies only to property and self-employment income, the software you use also needs to handle other income that feeds into your overall Income Tax position, such as savings interest, pension payments and dividends.
MTD software either organises financial data into the correct format for HMRC or connects to bridging software, such as spreadsheets or third-party accounting packages.
Software that creates and maintains records will typically:
Bridging software, by contrast, connects to records held in spreadsheets or other software and submits quarterly updates and end-of-year returns on the landlord's behalf.
For many landlords, rental income is only one part of a broader financial picture, with other income sources and a wide range of expenses. In those cases, mainstream accounting platforms are often more practical than software designed purely for property portfolios. General accounting software is usually built to handle bank feeds, mixed income streams, recurring categorisation and digital submissions in one place, without forcing everything into a strict property-by-property structure.
Property-specific software can look attractive at first, but it can become restrictive once a landlord steps outside a narrow use case. This is particularly noticeable when there is non-property income, shared expenses or operational costs that do not map neatly to a single unit. Simpler systems that prioritise day-to-day usability are often easier to stick with, especially if you want clarity rather than lots of reporting.
When comparing MTD-compatible options, it generally makes sense to start with established accounting platforms that already support a wide range of income types, savings and business accounts. You can then weigh these against landlord-focused products to see which approach fits your working style. There is no single "best" solution. The right choice depends on whether flexibility across all your income matters more than property-specific reporting.
At the Guild, we are also portfolio landlords. Our preferred approach is to use standard accounting software, such as Xero, which we recommend based on experience (not an affiliate link or an advert). The Guild has been required to submit quarterly reporting for several years, and in practice, the submission process takes only a couple of clicks.
MTD isn't something landlords need to panic about. A simple approach is to set aside a few minutes each day to categorise transactions within your chosen software. Done consistently, quarterly reporting becomes a quick submission rather than a last-minute scramble.
HMRC has simplified the process of finding suitable software by providing a free online MTD search tool.
The tool asks a few questions, such as your income sources and whether you want to keep your own records or use bridging software to connect to an existing package.
All MTD software must:
Many providers offer free or trial versions of their software, but these often include time limits or data restrictions.
Further guidance on choosing MTD software for landlords is available on GOV.UK.