Landlord Accounting Software UK: Best MTD-Ready Tools for 2026

What is landlord accounting software?

Landlord accounting software is purpose-built financial management software designed specifically for rental property owners. It handles the unique requirements of property income that generic business accounting tools were never designed for.

Unlike general accounting software built for shops, freelancers, or service businesses, landlord accounting software understands that rental property has its own financial rules. Tenant deposits are not income. Mortgage interest is not a simple deduction. A new boiler might be a repair or an improvement, and the distinction matters for tax.

At its core, landlord accounting software does three things:

1. Tracks income and expenses per property - so you know exactly how each property performs financially, not just your portfolio as a whole
2. Categorises transactions using landlord-specific rules - pre-configured for allowable expenses, capital expenditure, and Section 24 mortgage interest relief
3. Submits to HMRC digitally - quarterly updates and end-of-year declarations required under Making Tax Digital

Good landlord accounting software also provides tax estimates throughout the year, stores receipts digitally, and generates reports your accountant can use. The best tools combine accounting with property management features like compliance tracking, tenancy management, and document storage.

Why landlords need dedicated accounting software

Generic accounting tools like QuickBooks and Xero work well for businesses, but they don't understand property income. Using them for rental accounting means manual workarounds for things landlord-specific software handles automatically.

The problems with generic accounting software for landlords

Mortgage interest is not a simple expense. Since the phased introduction of Section 24 (completed in April 2020), mortgage interest is no longer deductible from rental income. Instead, landlords receive a 20% tax credit. Generic accounting software treats mortgage interest as an ordinary expense, which gives you the wrong profit figure and the wrong tax liability. Landlord-specific software handles Section 24 correctly, showing your true tax position.

Per-property tracking requires manual setup. If you own three properties, you need to know the income and expenses for each one individually. Generic software requires you to create tracking categories, cost centres, or classes manually and tag every transaction. Landlord software tracks by property automatically because it was built with multiple properties as the default assumption.

Tenant deposits are not income. When a tenant pays a deposit, it does not count as rental income. When you return it, it is not an expense. Generic software does not know this. It will include deposits in your income figures unless you manually handle them as liabilities. This is a common mistake that inflates your reported income.

Capital vs revenue expenditure matters for tax. Replacing a broken kitchen tap is a repair (allowable expense). Installing a completely new kitchen is a capital improvement (not deductible, but relevant for capital gains tax when you sell). Landlord software helps you categorise correctly. Generic software leaves this distinction to you.

Replacement domestic items relief. Since the old wear and tear allowance was abolished, landlords can only claim the cost of replacing furnishings on a like-for-like basis. If you replace a fridge that cost you £300 with one costing £500, you can only claim £300. Landlord accounting software understands this calculation. Generic tools do not.

What landlords need that generic software does not provide

• Per-property P&L: Income and expenses separated by each property, not just by overall portfolio
• Section 24 handling: Mortgage interest shown as a 20% tax credit, not a deduction
• Pre-configured categories: Landlord-specific allowable expense categories ready to use
• Deposit management: Correct treatment of tenant deposits as liabilities
• Capital vs revenue: Guidance on classifying improvements vs repairs
• MTD submission: Direct quarterly submission to HMRC via API
• Threshold calculations: Aggregating income across properties for MTD thresholds

MTD compliance: the April 2026 deadline

Making Tax Digital for Income Tax becomes mandatory from April 2026 for landlords earning over £50,000. Your accounting software must be HMRC-recognised and capable of quarterly digital submissions.

What MTD requires

MTD changes how landlords keep records and report to HMRC. Under the new rules, you must:

• Keep digital records: All income and expenses stored digitally in MTD-compatible software (not paper receipts in a shoebox)
• Submit quarterly updates: Report income and expenses to HMRC every quarter, not just once a year
• File an end of period statement: Confirm each income source at tax year end
• Submit a final declaration: Replaces your annual self-assessment tax return
• Use HMRC-recognised software: Your software must connect directly to HMRC systems via API

Key MTD dates for landlords

• April 2026: MTD mandatory for landlords earning £50,000+ gross rental income
• April 2028: MTD mandatory for landlords earning £30,000+ gross rental income
• Quarterly deadlines: 5th of the month following each quarter end (e.g., 5 July for Q1 April-June)

The gross income threshold is your total rental income before any expenses. If you earn £55,000 in rent across all your properties, you are above the threshold even if your profit after expenses is only £20,000. Read our full guide on how to prepare for Making Tax Digital.

Why you should start now

Even if MTD is not yet mandatory for you, starting early gives you three advantages:

1. Trial run: The 2025-26 tax year is your chance to test the process before it counts
2. Better records: Digital records improve your existing self-assessment returns
3. No rush: Setting up software, importing historical data, and learning the workflow takes time you won't have if you leave it until March 2026

Key features to look for in landlord accounting software

Not all landlord accounting tools are equal. Here are the features that matter most for UK rental property owners.

Essential features

• Income and expense tracking per property: See how each property performs individually, with rent received, void periods, and all costs broken down per unit
• Receipt scanning and storage: Photograph receipts on your phone and have them stored digitally against the correct expense. The best tools use AI to extract amounts, dates, and categories automatically
• Statement upload: Upload CSV or PDF bank statements for AI-powered import and categorisation, so you do not need to enter everything manually
• MTD quarterly submission: Direct connection to HMRC for quarterly updates, end of period statements, and final declarations. Must be on HMRC's recognised software list
• Tax reports and estimates: Running estimates of your tax liability throughout the year, not just at year end. Helps with cash flow planning for January and July tax payments
• Section 24 mortgage interest: Correct handling as a 20% tax credit rather than an expense deduction

Nice-to-have features

• Automatic transaction categorisation: AI or rule-based categorisation that learns from your previous transactions
• Capital allowances tracking: Distinguishing capital improvements from revenue repairs and tracking enhancement expenditure for future CGT calculations
• Rent collection tracking: Monitoring which tenants have paid, which are late, and generating payment reminders
• Accountant access: Ability to share read-only or full access with your accountant
• Multi-property portfolio view: Dashboard showing all properties at a glance with key financial metrics
• Compliance integration: Combining accounting with gas safety, EICR, and EPC compliance tracking in one platform

LandlordOS accounting features

LandlordOS is purpose-built for UK self-managing landlords, combining property accounting with compliance tracking and tenant management in a single platform.

AI-powered receipt scanning

Photograph a receipt or invoice with your phone and LandlordOS uses AI to extract the amount, date, supplier, and expense category automatically. No manual data entry. Receipts are stored digitally against the correct property and expense category, meeting MTD's digital record-keeping requirements.

Automatic transaction categorisation

When you upload bank statements, LandlordOS categorises transactions into the correct landlord expense categories. It learns from your corrections, so categorisation improves over time. Recurring transactions like mortgage payments, insurance premiums, and letting agent fees are recognised automatically after the first time.

Bank statement upload

Upload CSV or PDF bank statements directly. LandlordOS parses the transactions, matches them to the correct property where possible, and flags anything that needs your attention.

Per-property financial tracking

Every income and expense entry is linked to a specific property. See profit and loss for each property individually, compare performance across your portfolio, and identify which properties are generating the best returns. This is essential for portfolio decisions and tax reporting.

MTD-ready quarterly reporting

LandlordOS is built for Making Tax Digital compliance. Submit quarterly updates to HMRC directly from the platform, file end of period statements, and complete your final declaration. No bridging software or manual exports needed.

Combined property management

Unlike standalone accounting tools, LandlordOS also handles compliance reminders (Gas Safety, EICR, EPC), document storage with AI-powered certificate reading, tenancy tracking, and rent management. One platform instead of several.

• Free for 1-2 properties
• From £9/month for larger portfolios
• No credit card required to start

Comparison: LandlordOS vs Hammock vs FreeAgent vs spreadsheets

How do the main options compare for UK landlord accounting? Here is a detailed breakdown of features, pricing, and suitability.

LandlordOS

Purpose-built for UK self-managing landlords. Combines accounting with property management, compliance tracking, and document storage. AI-powered receipt scanning and automatic categorisation reduce manual work. Free for 1-2 properties. Best for landlords who want one platform for everything.

Hammock

Simple, streamlined landlord accounting with Open Banking integration. Clean interface that works well for landlords who find other software overwhelming. Free tier available with Pro from £6/month. Best for landlords who want minimal complexity and just need the accounting basics done correctly.

FreeAgent

General accounting software designed for self-employed and small businesses. MTD compatible and free with some banks (NatWest, RBS). Good if you have mixed income sources (self-employment plus rental). However, it requires manual configuration for per-property tracking and does not handle Section 24 natively. Best for landlords who already use FreeAgent for other income.

Spreadsheets

Spreadsheets do not meet MTD requirements on their own. They cannot submit to HMRC, do not provide digital record-keeping as defined by HMRC, and lack any automation. Some landlords use bridging software to connect spreadsheets to HMRC, but this adds cost and complexity. For landlords above the MTD threshold, spreadsheets are no longer a viable primary accounting method.

Other options: QuickBooks, Xero, Landlord Vision

Free vs paid landlord accounting software

Several landlord accounting tools offer free tiers, but the features and limitations vary significantly. Here is what to expect at each price point.

Free options

Free tiers typically cover landlords with 1-2 properties and basic accounting needs:

• LandlordOS Free: 1-2 properties, per-property tracking, MTD submission, basic compliance reminders, receipt scanning
• Hammock Free: Limited properties, Open Banking connection, basic categorisation
• FreeAgent (via NatWest/RBS): Full features if you bank with NatWest or RBS, but not landlord-specific

Free options are genuinely useful for landlords with small portfolios. If you have 1-2 properties and straightforward finances, a free tier may be all you need for MTD compliance.

Paid options (£6-15/month)

Paid plans unlock features that matter as your portfolio grows:

• Unlimited or more properties
• Advanced reporting and tax estimates
• Accountant access and collaboration
• Priority support
• Additional automation and AI features
• Document storage and compliance tracking

For landlords with 3+ properties or complex finances (multiple income sources, joint ownership, company structures), paid plans are worth the investment. The time saved on manual data entry and the accuracy of purpose-built categorisation typically outweigh the monthly cost.

The hidden cost of "free" spreadsheets

Spreadsheets appear free but have real costs: time spent on manual data entry, risk of errors in tax calculations, no MTD compliance without bridging software (which itself costs money), and no digital record-keeping audit trail. For landlords above the MTD threshold, spreadsheets are no longer a viable option without additional paid tools.

Allowable expenses for landlords

Knowing which expenses you can claim is essential for accurate accounting and minimising your tax bill. Good landlord accounting software has these categories pre-configured.

HMRC allows landlords to deduct the following expenses from rental income:

Fully deductible expenses

• Letting agent fees: Management fees, tenant-finding fees, rent collection
• Insurance: Landlord buildings and contents insurance, rent guarantee insurance
• Maintenance and repairs: Plumbing, electrical, decorating, garden maintenance (but not improvements)
• Utility bills: If you pay them rather than the tenant (common in HMOs)
• Ground rent and service charges: For leasehold properties
• Accountancy fees: Cost of preparing rental accounts and tax returns
• Legal fees: For short leases (under 1 year), eviction costs, debt recovery
• Advertising: Costs of finding new tenants (listings, photos, etc.)
• Council tax: During void periods between tenancies
• Travel expenses: Mileage to visit properties for management purposes
• Stationery and phone: Business portion of costs related to property management

Replacement domestic items relief

You can claim the cost of replacing furnishings (carpets, curtains, white goods, furniture) on a like-for-like basis. If you upgrade, you can only claim the cost of an equivalent replacement, not the full upgrade cost.

Mortgage interest (Section 24)

Mortgage interest is no longer deductible from rental income. Instead, you receive a 20% tax credit on the interest paid. This distinction is critical: it means higher-rate taxpayers pay more tax than before Section 24. Read our full Section 24 guide for worked examples.

For a complete breakdown with examples, see our landlord allowable expenses guide.

How to choose the right landlord accounting software

The best software depends on your situation: portfolio size, other income sources, technical confidence, and whether you use an accountant.

Choose landlord-specific software (LandlordOS, Hammock, Landlord Vision) if:

• Rental property is your only or main income source
• You want accounting set up correctly from the start with no manual configuration
• You value simplicity and landlord-specific categorisation
• You want combined accounting and property management (compliance, tenants, documents)
• You are new to property accounting and want guided setup

Choose general accounting software (QuickBooks, Xero, FreeAgent) if:

• You already use these tools for other self-employment or business income
• Your accountant prefers these platforms and wants direct access
• You have complex business structures (limited company, partnership)
• You are comfortable configuring tracking categories and custom expense types

Quick recommendation guide

• 1-2 properties, want free: LandlordOS Free or Hammock Free
• 3-10 properties, self-managing: LandlordOS (combines accounting + property management)
• Want detailed financial reports: Landlord Vision
• Want simplest possible option: Hammock
• Already use QuickBooks/Xero: Stay with it, add property tracking categories
• Work with accountant: Ask what they prefer, then choose accordingly
• Currently using spreadsheets: Switch to any of the above before April 2026

For a detailed comparison of all MTD-compatible software options, see our dedicated guide.

How to get started with landlord accounting software

Getting set up does not need to be complicated. Most landlords can be up and running in under an hour. Here is a step-by-step approach.

Step 1: Gather your information

Before you start, collect:

• Property addresses and purchase prices
• Current mortgage details (lender, outstanding balance, monthly payment, interest rate)
• Tenant names, rent amounts, and tenancy start dates
• Recent bank statements (ideally the current tax year)
• Any receipts or invoices you have for property expenses

Step 2: Set up your properties

Add each property with its address, purchase date, and current mortgage details. This creates the per-property tracking structure that everything else hangs off.

Step 3: Connect your bank or upload statements

The fastest way to populate your accounts is to upload bank statements (CSV or PDF). Most landlord software will parse the transactions and attempt to categorise them automatically.

Step 4: Review and correct categorisation

Check the automatic categorisation and correct any mistakes. This trains the AI/rules engine, so future transactions are categorised more accurately.

Step 5: Set up MTD (when ready)

Link your software to your HMRC account via Government Gateway. You will need your Government Gateway ID and password. Once connected, you can submit quarterly updates directly from your accounting software.

For a detailed walkthrough of MTD setup, read our guide on how to prepare for Making Tax Digital.