MTD Software Checklist for Landlords

Making Tax Digital for Income Tax (MTD for ITSA) requires software that can keep digital records and submit quarterly updates directly to HMRC, and not every landlord accounting tool, or spreadsheet, meets that bar on its own. If your qualifying income has crossed the relevant threshold, or is likely to soon, checking your software against a specific checklist now avoids discovering a gap close to your first deadline.

This guide sets out what MTD-compatible software actually needs to do, the checklist to work through before your mandate date arrives, common gaps that catch landlords out, and how to prepare if you are not quite in scope yet.

What "MTD-compatible" actually means

HMRC does not certify individual products as a fixed list of approved software, it publishes functional requirements and a list of providers who say their software meets them. In practice, compatible software needs to do three things: keep digital records of your property income and expenses as they happen, calculate and submit quarterly updates directly to HMRC's system rather than through the old Self Assessment portal, and support the final declaration at the end of the tax year.

A spreadsheet on its own does not do this. Bridging software can connect a spreadsheet to HMRC's system for submission purposes, which is a reasonable short-term option if you already trust your spreadsheet, but it does not replace the underlying discipline of digital record keeping that MTD for ITSA is built around. Our guide to Making Tax Digital for landlords covers the thresholds and rollout timeline in full if you are still confirming whether, or when, you are in scope.

The checklist

Work through these points with any software you are using or considering, rather than assuming a compatibility claim on a pricing page tells the whole story:

• Does it submit quarterly updates directly to HMRC? Ask specifically, not generally, since some tools handle record keeping well but rely on a separate bridging step for submission.
• Does it categorise income and expenses by property? MTD reporting still needs to map onto the same property income categories used for Self Assessment, so software that only tracks a single combined total across your whole portfolio creates extra work at the final declaration stage.
• Does it connect to your bank account, or rely on manual entry? Manual entry every quarter is a much heavier ongoing task than it was once a year, since you cannot leave it until January anymore. Our guide to Open Banking for landlords covers how automated bank feeds work and why they matter more under quarterly reporting.
• Can you correct a submitted quarterly update if a figure was wrong? Quarterly updates are cumulative running totals that can be adjusted later, and your software should make correcting an earlier figure straightforward rather than requiring you to contact support.
• Does it support the final end-of-year declaration, where reliefs and allowances are applied, not just the four quarterly submissions? Some tools handle quarterly updates well but expect your accountant to handle the final declaration separately, which is fine as long as you know that in advance.
• Does it handle multiple properties, and mixed ownership if relevant? If you hold some properties personally and others through a limited company, check whether the software can keep both reporting bases separate and correct, since limited company property income does not go through MTD for ITSA in the same way personal property income does.
• Can your accountant access the same data? If your accountant handles submissions on your behalf, check whether they can log in, receive an export, or connect directly to your software's data, rather than you needing to forward figures manually every quarter.

Common gaps

• Bridging software treated as a permanent solution. It solves the submission requirement but not the underlying record-keeping discipline MTD assumes, and error correction across a spreadsheet-plus-bridge setup is generally harder than in dedicated software built around this from the start.
• Software that categorises transactions at the portfolio level, not the property level. This works for a simple annual return but creates a reconciliation problem every quarter, since you have to manually split figures you should already have separated as they happened.
• No live bank feed, meaning categorising a quarter's transactions becomes a backlog task done under deadline pressure every three months rather than an ongoing habit.
• Assuming your accountant's existing process covers MTD automatically. Some firms have a preferred MTD-compatible platform they already connect to; others expect you to handle quarterly submissions yourself and only engage at the final declaration. Confirm which model applies to you well before your first deadline, not the week it is due.

Preparing before your mandate date

If your threshold has not arrived yet, the practical preparation is the same regardless of exactly when it does:

1. Move to digital record keeping now, so the transition to quarterly submission is a change of frequency, not a change of method learned under pressure.
2. Separate rental banking from personal banking, since clean transaction data is the basis of every quarterly figure.
3. Categorise income and expenses by property as they happen, which is exactly the discipline MTD assumes and rewards.
4. Confirm with your accountant which software they support and who is responsible for each quarterly submission.
5. Test the software's correction process on a small, low-stakes figure before you rely on it under a real deadline.

A worked example

Consider a landlord with three properties and combined qualifying income of £58,000, mandated into MTD for ITSA from April 2026 based on their 2024-25 income. Before the deadline arrived, they were using a spreadsheet, updated in batches every few months, with expenses split unevenly between three tabs and no bank feed. Working through the checklist above exposed two problems: the spreadsheet had no direct submission route to HMRC, requiring bridging software as an extra step, and transactions were not categorised by property consistently, since two of the tabs used slightly different expense labels.

Rather than trying to fix the spreadsheet under deadline pressure, this landlord moved to dedicated software three months before their first quarterly submission was due, with an Open Banking feed doing the categorisation as transactions cleared. By the time the first deadline arrived, the quarterly figures were already sitting in the software rather than needing to be assembled from three separate tabs, and the submission itself took minutes rather than being a stressful scramble.

How Property HQ helps

Property HQ connects to your bank accounts via Open Banking, categorises transactions by property as they clear, and keeps digital records in the format Making Tax Digital expects, so working through this checklist against your own setup, and preparing for quarterly submissions, is a review step rather than a rebuild from scratch. Our landlord accounting software guide covers the wider bookkeeping feature set worth checking alongside MTD compatibility specifically.

Disclaimer

This guide is general information for UK landlords, not legal, tax or mortgage advice. Making Tax Digital rules and thresholds can change - check GOV.UK, HMRC or a qualified adviser for your situation.