MTD software trap: 44 of 128 apps can’t file your tax return

Buying Making Tax Digital software that can send your quarterly updates is the easy part. Finding one that can also file your end-of-year tax return is harder than it should be. When we went through HMRC’s own software finder on 7 October 2026, 44 of the 128 products listed for UK property income could only send quarterly updates. None of those 44 can yet submit the tax return that closes off your year.

That matters because under Making Tax Digital for Income Tax, the tax return has to go through compatible software too. If the product you have spent a year feeding receipts into can’t file it, you will be shopping for a second product in January, against a 31 January deadline.

This affects every landlord already signed up from April 2026 and anyone who is choosing software now ahead of the next wave in April 2027. Here is how to read HMRC’s listings properly, what to check before you pay, and a tool to work out your start date and test any product against the features you need.

What HMRC’s software list actually shows

HMRC’s Find software that works with Making Tax Digital for Income Tax tool listed 152 products in total when we checked on 7 October 2026. We filtered them for UK property income and then opened every product page.

HMRC defines “In development” as meaning the provider “has committed to building this in time for the 2026 to 2027 tax return”. “Not included” means the feature isn’t available in that product. So a product that shows the return as in development is a promise, not a finished feature.

The detail goes further than the headline count. Even among the 84 products that can file a return, the product pages list 16 other income sources and items the return may need. Only 40 show UK savings interest and UK dividends as ready now. Only 27 show Capital Gains as ready now.

Specialist landlord tools come out worst. Of the 11 products built only for UK property income, just 4 could file the tax return when we checked. HMRC’s list changes often, so treat these figures as a snapshot and check your own product’s page before relying on it.

Why the tax return is the feature that matters

HMRC’s software guidance says your software must create and store digital records, send quarterly updates, add your other income sources, and submit your tax return by 31 January following the tax year.

Quarterly updates are only summaries. HMRC says plainly that “they are not tax returns”. The return is where you add savings interest, dividends and any other income or gains HMRC hasn’t pre-filled. You can’t file it through the old Self Assessment route once you’re in MTD.

You are allowed to use more than one product. You can’t split a single submission across products, though. A landlord can’t send property quarterly updates through two products. You could send updates in one product and file the return in another, but HMRC says you must make sure they “work together”.

Penalties change too. HMRC won’t give penalty points for late quarterly updates in 2026-27, but you still need to send all of them before you can submit the return. From 2027-28, every missed quarterly update or return deadline adds one point. At 4 points you get a £200 penalty, and another £200 for each further missed deadline.

Worked example: a landlord who misses five deadlines in a row from 2027-28 reaches 4 points on the fourth miss (£200) and pays another £200 on the fifth. That is £400 in fines before any late payment penalties or interest.

Who needs MTD software, and when

MTD for Income Tax is an HMRC rule, so it applies to UK self-employment and property income across England, Scotland, Wales and Northern Ireland. It covers sole traders and landlords registered for Self Assessment, based on their qualifying income.

Qualifying income is your total self-employment and property income before expenses, meaning your gross rent and turnover. PAYE wages, pensions, dividends and partnership profit shares don’t count towards it.

Example 1: you collected £38,000 gross rent in 2025-26 and have no other self-employment. You are over £30,000, so you join MTD on 6 April 2027. Your first quarterly update is due by 7 August 2027 and your first MTD return by 31 January 2029.

Example 2: you and your sibling own a property that brings in £50,000 a year, split equally. HMRC’s own example says your qualifying income is your share, £25,000. That’s under £30,000, but over £20,000 in 2026-27 would bring you in from April 2028.

Example 3: £25,000 of rent plus £27,000 of self-employed turnover makes £52,000 of qualifying income. That is HMRC’s own worked example, and it’s over all three thresholds.

How to check a product before you pay

On HMRC’s finder, every result has a “Find out what [product] provide now and what they’re developing” link. That page is the one to read, not the supplier’s marketing. Look at these sections in order.

• Submission type on the results list should say “Quarterly updates, Tax return”. If it only says “Quarterly updates”, the product can’t finish your year yet.
• What is needed for quarterly updates: UK property should say “Ready now”. If you also let property abroad or are self-employed, check foreign property and sole trader too.
• What is needed for tax returns: check every item that applies to you, such as UK interest, dividends, employment (PAYE), pensions, Capital Gains and the High Income Child Benefit Charge. Each needs to say “Ready now”, or at least “In development”.
• Update period: standard (6 April to 5 April) or calendar (1 April to 31 March). Pick the one that matches how you keep your books.
• Record-keeping style: “creates digital records” if you’ll keep your books in the app, or “bridging” if you want to keep your spreadsheet. Of the 128 property products, 72 offer bridging.
• HMRC Assist (submission feedback), which HMRC says flags potential mistakes in your return, and whether there’s a free version. Free versions may cap transactions.

Jointly owned property: HMRC lets you include either income and expenses, or income only, for jointly let properties in quarterly updates. If you leave expenses out, you must add them by resending your fourth update before the return. Check your software supports this, and also check whether you need it to handle more than one agent.

MTD readiness and software checker

Enter your gross qualifying income and the tax year it relates to, then tick what your chosen product shows as “Ready now” on HMRC’s product page.

What to do now: step by step

1. Confirm your start date. Add up your gross rent and self-employed turnover from your latest return, using your share for joint property. Then run HMRC’s eligibility checker.
2. List everything on your return. That means rent, interest, dividends, salary, pensions, gains and Child Benefit. Your software has to cover all of them by January.
3. Use HMRC’s finder, then open the product page. Rule out anything whose submission type doesn’t include “Tax return”, unless you’re happy relying on an “In development” commitment.
4. Already signed up with a quarterly-only product? Ask the provider for a date for tax return filing. If it’s marked “Not included”, line up a return-capable product well before January 2028.
5. Send your Q2 update by 7 November 2026 if you’re already in. It covers 6 April to 5 October, or 1 April to 30 September on calendar periods. Updates are cumulative, so you can fix earlier figures in later ones.
6. Joining in April 2027? Choose your software before you sign up, as HMRC advises. That gives you a full year to test it, including a practice run of the return section.

• Gross qualifying income worked out (my share of joint lets only)
• MTD start date confirmed with HMRC’s checker
• Product page shows UK property quarterly updates “Ready now”
• Submission type includes “Tax return”
• Every other income item I have shows “Ready now”
• Update period matches my books (standard or calendar)
• Bridging available if I keep a spreadsheet
• Joint-property expense handling understood
• Quarterly deadlines in diary: 7 Aug, 7 Nov, 7 Feb, 7 May
• Tax return deadline in diary: 31 January

MTD software FAQ

Can I use one app for quarterly updates and another for my tax return?

Yes. HMRC allows one product for records and quarterly updates and another for the return. You can only use one product for each separate submission, though, and the products need to work together.

What does “In development” mean on HMRC’s software finder?

HMRC says it means the provider has committed to building the feature in time for the 2026 to 2027 tax return. It isn’t available yet.

When is my first Making Tax Digital tax return due?

If you started on 6 April 2026, your first MTD return covers 2026-27 and is due by 31 January 2028. Your 2025-26 return, due 31 January 2027, is filed through normal Self Assessment.

Is there free MTD software for landlords?

Yes. 32 of the 128 property products on HMRC’s finder had a free version when we checked, and 22 of those could also file the return. HMRC warns free products may have limits, such as a cap on transactions.

Do I get penalised for a late quarterly update this year?

Not in 2026-27. HMRC won’t apply penalty points for late quarterly updates in that year, but late returns still get points. From 2027-28, 4 points means a £200 penalty.

Can I keep using my spreadsheet for MTD?

Yes, with bridging software that connects your spreadsheet to HMRC. Check the bridging product can file the tax return as well as quarterly updates.