Making Tax Digital: Which Software Works Best for Landlords?

Why Landlords Need to Act Now

Making Tax Digital (MTD) for Income Tax is finally happening.

From April 2026, if your total rental income is £50,000 or more, you’ll need to keep digital records and submit quarterly updates to HMRC. From April 2027, the threshold drops to £30,000, and later it’s expected to reach £20,000.

So, whether you’ve got one buy-to-let or a full portfolio, you’ll need to use MTD-compatible software to stay compliant. But which system actually makes life easier for landlords?

Read more here about what Making Tax Digital is and how it affects landlords.

** Attend our free webinar on 12th November 2025 on Making Tax Digital For Landlords and Property Investors **

The Main Software Options

There are five realistic routes most landlords are considering right now:

Xero, FreeAgent, Hammock, Landlord Vision, and Spreadsheet bridging tools.

Let’s look at how they compare in practice – not just on paper.

Hammock – Built for Property People

If you want software designed specifically for landlords, Hammock stands out.

It connects directly to your bank, automatically matches rent payments, categorises expenses, and produces the reports you’ll need for MTD.

It even tracks yields, arrears, and cash flow for each property — all from one dashboard.

Most users find it easy to set up, and it’s already fully HMRC-approved for MTD for Income Tax.

In short, Hammock is ideal for landlords who want a “plug-and-play” solution without needing accounting knowledge.

Xero – The Accountant’s Favourite

Xero is a fantastic piece of software if you already run your properties through a limited company or you want your accountant fully involved.

It’s very powerful, integrates with add-ons like Dext or HubDoc for receipts, and your accountant will probably love it.

However, it wasn’t built with landlords in mind.

You’ll need to set up “tracking categories” to separate each property’s income and expenses.

For company landlords or those already using Xero for VAT and payroll, it’s a logical choice.

But if you just want to track rent and repairs, it can feel a bit heavy-duty.

FreeAgent – Simple and Often Free

FreeAgent is a great entry-level system, especially if you bank with NatWest, RBS, or Mettle, as they include it for free.

It’s officially MTD-ready and has an easy-to-use interface.

The downside? It doesn’t automatically track multiple properties.

You’ll need to set up separate “projects” or tags for each one.

For smaller landlords or those who are self-employed as well, it’s a tidy all-in-one option.

It keeps things simple without overwhelming you with features.

Landlord Vision – For the Detail Lovers

Landlord Vision is an all-round property management system that happens to include accounting tools.

It can handle everything from tenant onboarding and rent reminders to maintenance tracking and financial reporting.

MTD submissions are supported through a bridging connection, rather than a direct HMRC link.

If you enjoy detailed analysis and like having everything in one place — leases, expenses, and forecasts — this is a strong choice.

But it takes time to learn, so it suits landlords who enjoy hands-on management.

Spreadsheet + Bridging Tool – Cheap but Risky

You can technically comply with MTD using Excel or Google Sheets and a “bridging tool” such as 123 Sheets, BTC, or GoSimple.

This approach links your spreadsheet to HMRC for quarterly submissions.

It’s the cheapest option, but it’s also the easiest to get wrong.

Manual data entry means more errors, more admin, and more stress.

HMRC is already signalling that this workaround may not last forever.

It’s fine for testing or very small landlords, but not a long-term fix.

Which One Is Best for You?

If you’ve got 1 to 3 properties and want a stress-free setup, choose Hammock.

If you manage a larger portfolio or want detailed tenancy control, go with Landlord Vision.

If you operate through a limited company, Xero is your best friend.

If you’re a sole trader with mixed income, FreeAgent is simple and may cost you nothing.

And if you love your spreadsheets, try a bridging tool — but prepare to move later.

What Happens Next?

If your rental income exceeds £50,000, MTD applies from April 2026.

Now is the time to test software, connect your bank, and ensure your accountant can log in too.

Quarterly digital reporting will soon replace the January rush — but only if your records are set up correctly.

Final Thought

As one landlord put it: “Once I switched to Hammock, I realised MTD wasn’t the problem — my old spreadsheets were.”

If you’re unsure which platform suits your setup, speak to a property-savvy accountant or join the Property118 community discussion.

You’ll find hundreds of landlords already testing these systems ahead of the 2026 deadline.

Also, don’t forget to attend our free webinar 12th November 2025: Making Tax Digital for Landlords and Property Investors.

By Simon Misiewicz FCCA ATT EA MBA
UK-US Property Tax Specialist | Optimise Accountants | Property118 Contributor