As the UK government’s Making Tax Digital (MTD) scheme rolls out for more taxpayers, landlords are now squarely in the spotlight. If you earn over £50,000 from rental income, you will soon need to keep digital records and send quarterly updates to HMRC using approved MTD software. That’s the law. But not all MTD software for landlords is built with landlords in mind, and making the wrong choice could cost you time, money, and a lot of stress.
With so many products on the market promising to be MTD-compliant, it is easy to get caught up in the sales talk. But what works for a self-employed graphic designer might not work for someone managing three rental properties in different postcodes.
Here are three red flags to watch out for before you commit to any MTD software for landlords.
- It Is Built for General Businesses, Not Landlords
Many MTD tools are designed with small businesses in mind — think cafes, tradespeople, or online retailers. These platforms often assume you are invoicing customers, managing stock, or tracking overheads. That is great for them, but landlords deal with a completely different set of tasks.
If a software package cannot easily handle things like rental income per property, mortgage interest, agent fees, or repairs and maintenance, it is not really designed for you. Worse still, some systems will force you to shoehorn property income into categories meant for business sales, which can get messy quickly.
What to do instead: Look for MTD software for property owners that specifically mentions property income, supports multiple properties, and allows you to tag expenses clearly. If the tool cannot separate income and expenses by property, walk away.
- It Does Not Connect with Your Current Tools or Bank
Let’s face it — landlords often use spreadsheets, letting agent reports, and online banking to stay organised. If your MTD software cannot sync with your bank account or import data easily, you will end up wasting hours typing everything in by hand. That completely defeats the purpose of “making tax digital”.
Some providers claim to be compatible with HMRC but do not support open banking feeds or CSV imports, leaving you to do all the legwork. Others charge extra for features like automation or bank syncing — which can make the “low monthly fee” balloon into something much pricier.
What to do instead: Choose software for landlords that connects directly to your bank, supports automated feeds, and makes it easy to upload or import existing records. Bonus points if it can read your letting agent statements without a headache.
- There Is No Real Support When You Need It
Even with the most intuitive software, there will be times when you hit a roadblock. Whether it is a syncing error, a confusing tax setting, or a submission that will not go through, the last thing you want is to be stuck with a chatbot or waiting days for an email reply.
Many landlords are not accountants — nor should they have to be. MTD compliance can feel daunting, especially during the first few quarterly updates. Having access to real, knowledgeable support is not a nice-to-have; it is essential.
What to do instead: Before you buy, check whether the provider offers live chat, phone support, or email help from real people — ideally ones who understand MTD for landlords. Read online reviews and see what other property owners say about their experience.
Final Thought: Choose with Your Future in Mind
The MTD deadline is not going away. In fact, by 2027, landlords with as little as £30,000 in rental income will need to comply. That means now is the perfect time to find a system that will work not just today, but for years to come.
Choosing the right MTD software for land owners is not about picking the flashiest dashboard or the cheapest monthly fee. It is about finding a tool that fits your specific needs, keeps you compliant, and takes the stress out of tax reporting.
So, before you sign up or hand over your card details, watch out for these red flags. A few minutes of research now could save you hours — and a fair bit of tax-season panic — down the road.
