New analysis of HM Revenue & Customs’ official software directory has revealed that a significant portion of approved digital products cannot yet file complete tax returns for property owners. As the implementation of Making Tax Digital gathers pace, the finding has raised concerns across the property sector regarding landlords’ ability to meet their expanding digital reporting obligations.
According to research conducted by landlord software company LetCompliance, out of the 128 software products currently listed by HMRC for handling British property income under the Making Tax Digital framework, 44 products either feature tax return functionality that remains in development or do not include the capability at all.
The detailed breakdown of the official directory shows that while 84 products currently display the crucial tax return function as ready for use, 32 list the feature as still "in development," and another 12 omit the feature entirely. Furthermore, the analysis uncovered additional limitations among the tools deemed ready for action. Of the 84 products showing readiness for property income, only 11 possess the capability to handle all 16 other income types specified by HMRC, such as bank interest, dividend payments, and pensions.
Compliance Deadlines
The revelation comes as landlords and property investors navigate a complex landscape of shifting regulatory requirements. Making Tax Digital for income tax officially launched on April 6, 2026, targeting landlords and sole traders whose qualifying income exceeds £50,000 per year. The scope of the initiative is scheduled to expand significantly when the threshold drops to £30,000 on April 6, 2027, bringing a much broader segment of the self-employed and property-owning population into the mandatory digital reporting regime.
Under the operational rules of the system, landlords are required to submit four quarterly updates tracking their income and expenses, followed by a final comprehensive tax return, all submitted through compatible software. The transition has already introduced strict operational milestones, with the first quarterly reporting deadline having passed in August and subsequent deadlines scheduled throughout the year, including the upcoming submission window in November. For the 2026-2027 tax year, the full annual tax return must be successfully filed through the digital pipeline by January 31, 2028.
In response to concerns regarding tools that are not yet fully operational, HMRC has clarified its administrative definitions. The tax authority defines software marked as "in development" as carrying a formal commitment from developers to build and deploy the necessary functionality in time for the 2026-2027 tax return cycle. This designation suggests that these unfinished tools should be fully operational and ready for use before the final January 2028 submission deadline arrives.
The software readiness issue emerges at a time when landlords are already facing a growing accumulation of administrative requirements. Property investors across the United Kingdom are grappling with a wave of additional compliance measures designed to reshape the rental market. Alongside the digital tax transition, new regulatory obligations—ranging from updated property standards to damp and mould duties recently introduced in regions like Scotland—are adding substantial operational burdens to everyday property management.
Software Selection
The complexities of navigating the official software directory have prompted warnings from industry specialists regarding how property owners choose their digital tools. Erdem Volkan, founder of LetCompliance, emphasized the potential pitfalls for unprepared landlords attempting to satisfy their statutory duties using the government’s directory.
"Landlords are being told to pick software from HMRC’s list, and most will look at whether it sends the quarterly updates," Mr. Volkan said. "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 operates under a policy of neutrality regarding commercial products, meaning it does not endorse, recommend, or rank specific software packages. Instead, the tax authority displays compatible software in a randomized order on its official digital directory, leaving the due diligence entirely up to the taxpayer.
This hands-off approach to software promotion, combined with the findings from the LetCompliance research, highlights potential complications for landlords currently evaluating their digital options. The challenge is particularly acute for property investors who manage multiple income streams alongside their rental portfolios. Such individuals require comprehensive reporting capabilities that extend far beyond standard property rental income, making it essential to verify whether a chosen software package can handle the full spectrum of their financial reporting needs before committing to a long-term subscription.
