What kind of MTD software will you need as a landlord? How much will it cost and is there any free software available from HMRC? In this chapter, we answer these key questions and more on Making Tax Digital software for landlords.
Making Tax Digital (MTD) is on its way and it’s going to mean big changes for the majority of landlords. If you earn over £50,000 a year from your rental properties from 2026, or over £30,000 from 2027, you’ll need to use digital accountancy software to keep track of your income and expenses, and to make quarterly MTD submissions.
You may already keep your business records in a digital format using software. The difference with MTD compatible software is that it will be capable of:
maintaining business records as set out in the regulations
preparing and sending quarterly updates and end of period statements using the information maintained in your records
finalising your business income and submitting your declaration after the end of the tax year
communicating with HMRC digitally through an API
If you're already using bookkeeping software, such as Provestor’s property accounting app, then there's a good chance that your current software will be ready in time for MTD, and there shouldn't be any extra cost for you.
No. Whilst your agent will hold some of the information you need to submit - like rental income and maintenance costs - they don’t have the complete picture, including things like mortgage interest payments, insurances and other outgoings.
If you are using an agent, you will need to get detailed line-by-line records from them at least every quarter, and copy the records into MTD compatible software. With Provestor, it’s as simple as dragging and dropping your agent statement into our app, and we’ll take care of the rest.
If you use spreadsheets or hand all your records over to your accountant at the end of the year, then you're going to need to switch to some electronic bookkeeping software, such as Provestor’s property accounting app.
It will still be possible to submit MTD returns using a spreadsheet, however you’ll need MTD-compatible bridging software to enable the spreadsheet to submit the required data to HMRC. Importantly, HMRC states that information from a spreadsheet must not be physically re-typed into another software package.
Costs vary, but HMRC expects MTD software should cost landlords somewhere in the region of £11 per month.
You may be wondering about whether there's going to be any free software available from HMRC as there is for other tax returns. The short answer is no.
HMRC have said that they're not going to produce any free making tax digital software. Instead, they want software companies to make their products available for free for the smallest landlords.
If you just have a single rental property, there's a good chance that between now and April 2026 that there will be some free MTD software available to you.
(Here's a little secret: that's something we're working on here at Provestor! 🤫)
MTD applies per taxpayer, so if you own a share of a property with another person, your portion of the rental income will count towards your MTD threshold. If your share of rental income is over £50,000, then you’ll personally be in scope for MTD. However, with a jointly owned property there’s nothing to stop you from sharing digital records and making separate submissions.
At Provestor, our property accounting software is built specifically for landlords. It’s MTD-ready and we’ve got everything you need to keep track of your property finances. Whether you have one straightforward buy to let or are building a portfolio of mixed residential and commercial property, we can help.
We connect directly to your bank to download your property transactions automatically into our cloud accounting app, ready to be reviewed and submitted.
Generate, store and automate your rent invoices, following HMRC's best practices.
Record and categorise personal and property expenses correctly to claim all allowable expenses and save tax.
Maintain accurate records with our quick and easy to use property bookkeeping features.
Safely store receipts alongside expenses and bookkeeping transactions.
Provestor is one of a handful of accountancy services authorised and regulated by the Financial Conduct Authority (FCA) to connect directly to banks to download transaction data.