Editor's note: This brief was summarised by The Property AI Team from a report by PropertyWire. Read the original article for full details.
One Third of HMRC-Listed Tax Software Cannot File Full Landlord Returns
Analysis of HMRC's official software list shows that one in three products approved for Making Tax Digital cannot yet file complete tax returns for landlords. The findings raise concerns as quarterly reporting deadlines approach.
Of the 128 software products listed by HMRC for handling British property income under Making Tax Digital, 44 either have tax return functionality still in development or do not include it at all, according to research by landlord software company LetCompliance.
The analysis shows that 84 products display the tax return function as ready, whilst 32 list it as 'in development' and 12 do not include the feature. Of the 84 products showing readiness, only 11 can currently handle all 16 other income types listed by HMRC, including bank interest, dividends and pensions.
Compliance deadlines
Making Tax Digital for income tax launched on 6 April 2026 for landlords and sole traders with qualifying income exceeding £50,000. The threshold will drop to £30,000 from 6 April 2027.
Under the system, landlords must submit four quarterly updates plus a final tax return through compatible software. The first quarterly deadline passed in August, with the next due in November. For the 2026-2027 tax year, the full tax return must be filed by 31 January 2028.
HMRC defines software marked as 'in development' as committed to building the functionality in time for the 2026-2027 tax return, suggesting these tools should be operational before the January 2028 deadline.
The findings come as landlords face increasing administrative requirements, with additional compliance measures being introduced across the UK. New regulatory obligations are adding to operational burdens for property investors.
Software selection
Erdem Volkan, founder of LetCompliance, said: "Landlords are being told to pick software from HMRC's list, and most will look at whether it sends the quarterly updates. The tax return line matters just as much. A third of the products on the list cannot yet finish the year, so a landlord choosing today should check that line, and the other income they need to report, before they sign up."
HMRC does not recommend specific products but displays compatible software in random order on its official list.
The research highlights potential complications for landlords selecting software packages, particularly those with multiple income streams requiring comprehensive reporting capabilities beyond property rental income.
Source: PropertyWire