From 6 April 2026, every UK landlord with gross qualifying income above £50,000 must keep digital records and submit quarterly updates to HMRC through functional compatible software. Choosing that software is the first practical decision in the migration, and it shapes every later step: bank reconciliation, quarterly filing, the End of Period Statement and the Final Declaration. This piece compares the main HMRC-recognised options for landlords and sets out how to match a package to a portfolio. It sits within [the MTD ITSA hub](/guides/mtd-itsa-landlord-2026-guide/), the pillar guide that frames the whole regime.
Software is one link in a chain. Sound digital records under [the record-keeping rules](/blog/mtd-digital-record-keeping-rules/) feed the quarterly updates the software submits, and the same software produces [the Final Declaration that replaces Self-Assessment](/blog/mtd-final-declaration-replaces-self-assessment/) at the end of the year. Get the tool right and the rest of the cycle becomes routine. Get it wrong and every quarter becomes a scramble.
What "functional compatible software" actually means
HMRC uses the term "functional compatible software" for any product that can keep digital records and connect to the HMRC API to submit MTD updates. The product must be able to record transactions digitally, preserve digital links between source data and the submission, and send quarterly updates plus the Final Declaration through the API. HMRC publishes a list of recognised software for MTD for Income Tax; only products on that list can submit. A package that merely produces a nice profit-and-loss report but cannot file through the API is not compliant on its own.
Two broad shapes exist. End-to-end packages keep the records and file directly. Bridging software sits between a spreadsheet and the HMRC API, taking totals from the spreadsheet and submitting them while preserving the digital link. Most landlords are better served by an end-to-end package; bridging suits those with an established spreadsheet process they cannot easily abandon.
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The HMRC-recognised options for landlords
Several products are recognised for MTD for Income Tax and are commonly used by UK landlords. The four covered below are widely adopted, but the recognised list is longer and changes as vendors complete HMRC testing. Always check the current HMRC list before committing.
| Software | Built for | Property-specific features | Typical positioning |
|---|---|---|---|
| Hammock | Landlords specifically | Per-property profit and loss, rent tracking, tenancy records | Single-purpose landlord tool |
| FreeAgent | Small businesses and sole traders | Property income category, simple expense tracking | Free with some business bank accounts |
| Xero | Small to medium businesses | General ledger, tracking categories used per property | Scales to larger portfolios and companies |
| QuickBooks | Small businesses and self-employed | Class or location tagging per property | Broad accountant support base |
Hammock: built for landlords
Hammock is designed specifically for residential landlords rather than general business. Its core strength is treating each property as a distinct unit with its own income, expenses and profit view, which maps cleanly onto how HMRC expects property income reported. For a landlord with several tenancies, the per-property dashboard reduces the manual tagging that general ledger tools require. Bank feeds pull transactions in, and the product is built to submit MTD quarterly updates for property income through the HMRC API.
The trade-off is breadth. A landlord who also runs a separate trading business may find Hammock too narrow and need a second tool or a general package. For a pure property portfolio, that narrowness is a feature, not a limitation.
FreeAgent: free with some bank accounts
FreeAgent is a general small-business package that is provided free of monthly charge to customers of certain business bank accounts, which makes it attractive on cost. It handles property income as an income category and connects to bank feeds for reconciliation. It is recognised for MTD for Income Tax. For a landlord with one or two properties and a qualifying bank account, the effective software cost can be nil, which is hard to beat.
FreeAgent is not property-specialist, so per-property analysis relies on careful use of categories rather than a built-in property model. For a small portfolio that is manageable; for a larger one it becomes fiddly.
Xero: scales to larger portfolios
Xero is a full general ledger aimed at small and medium businesses, and it scales comfortably to larger property portfolios, limited companies holding property, and landlords who also trade. Tracking categories let a landlord report profit per property within a single ledger. Bank feeds are mature, the reporting is deep, and most accountants support it, which matters when an agent files on the landlord's behalf. Xero is recognised for MTD for Income Tax.
The cost is higher than the landlord-specific tools, and the learning curve is steeper than a single-purpose app. For a one-property landlord Xero can feel like overkill; for a portfolio of ten it is often the right level of capability.
QuickBooks: broad accountant support
QuickBooks is another general small-business package recognised for MTD for Income Tax, with a large base of accountants familiar with it. It supports per-property reporting through class or location tagging and has solid bank feeds. The choice between Xero and QuickBooks for a portfolio landlord often comes down to which one the landlord's accountant prefers, since agent familiarity reduces friction at quarterly filing and at the Final Declaration.
Bridging software and the spreadsheet route
A landlord who keeps records in a spreadsheet is not automatically out of compliance, but the spreadsheet alone cannot file. Bridging software connects the spreadsheet to the HMRC API and submits the totals while preserving the digital link, so there is no manual re-keying into an HMRC portal. This route keeps an existing process intact but adds a moving part, and the digital-link requirement means the data must flow into the bridging tool without copy-and-paste. For most small landlords an end-to-end package is simpler and less error-prone than spreadsheet-plus-bridging.
Bridging earns its place in specific cases: a landlord with a large, bespoke spreadsheet model that already runs the portfolio, or one whose figures originate in a property-management platform that exports to spreadsheet rather than to accounting software. In those situations the cost and disruption of rebuilding the whole process in a new package can outweigh the simplicity of an end-to-end tool. For a one or two-property landlord starting fresh, that calculation almost never favours bridging.
Cost, contracts and switching later
Pricing across the recognised products ranges from free, where FreeAgent comes bundled with a qualifying business bank account, through modest monthly subscriptions for landlord-specific tools, to higher tiers for full general-ledger packages like Xero and QuickBooks aimed at larger portfolios. Published prices change, so the figures to compare are the current vendor rates at the point of decision, not a number quoted in any article. The more useful question is total cost of ownership: a cheaper tool that needs heavy manual tagging every quarter can cost more in time than a slightly dearer one that automates the work.
Switching software later is possible but disruptive, because opening balances and historical records must migrate cleanly and the digital-record chain cannot be broken in the move. It is worth a little extra diligence at the outset to pick a tool that will still fit when the portfolio grows or when the threshold drops to £30,000 in April 2027 and then £20,000 in April 2028, pulling smaller landlords into the same regime.
How to match software to your portfolio
- One or two properties, qualifying bank account: FreeAgent is hard to beat on cost.
- Pure residential portfolio, several tenancies: Hammock for its per-property model.
- Larger portfolio, company structure, or mixed trading and property: Xero or QuickBooks.
- Established spreadsheet process you cannot abandon: a recognised bridging product.
- Accountant filing on your behalf: pick the package your agent already supports.
Bank feeds and the property bank account
Whichever package is chosen, a dedicated property bank account makes MTD materially easier. A bank feed that pulls clean rental income and property expenses into the software removes most manual entry and supports the digital-record discipline the regime requires. Mixing personal and property transactions in one account forces line-by-line categorisation every quarter and raises the risk of error. Separating the account before April 2026 is one of the highest-value preparation steps a landlord can take.
Do I need separate software for each property?
No. A single package holds the whole property business, with each property tracked as a sub-unit through the software's property model, tracking category or class tag. HMRC reports UK property as one income source, so one set of MTD updates covers the whole UK property portfolio. Separate software would only arise where a landlord also runs an unrelated trade that needs its own books.
Migrating before the first quarter
The first quarterly update for landlords inside MTD from April 2026 covers 6 April to 5 July and is due by 7 August 2026. Working backward, the software needs to be live, bank feeds connected, and opening balances reconciled against the 2025-26 closing position before 6 April 2026. A dry run through the first reconciliation cycle in the weeks before the deadline catches feed gaps and categorisation issues while there is still time to fix them. Leaving the choice and setup until the quarter has already started is the most common cause of a missed first filing.
Choosing with an accountant
An [MTD-ready accountant](/services/mtd-compliance/) will usually recommend the package they support best, because agent familiarity speeds up quarterly filing and the year-end Final Declaration. That is a legitimate reason to follow the agent's lead rather than picking on features alone. The software is only half the migration; the other half is the record-keeping discipline and the quarterly routine that the next two spokes in this cluster cover.