A UK landlord standing at the front door of a let terraced house in early evening light, holding a bunch of house keys and a phone, a small toolbox and a potted plant at their feet, brick steps and a

Xero, QuickBooks or FreeAgent for landlords under Making Tax Digital for Income Tax

29 September 2026 8 min read

Landlords with combined self-employment and property income above £50,000 must use Making Tax Digital for Income Tax from 6 April 2026. Xero says one organisation can cover both income sources from its £7 a month Simple plan, while QuickBooks and FreeAgent both require two separate subscriptions, taking the realistic monthly cost to roughly £20 and £29 respectively before VAT.

Written by Andrew McLean Studio Director at Disruptive Live

Making Tax Digital for Income Tax becomes mandatory on 6 April 2026 for anyone with combined self-employment and property income over £50,000 (HMRC). For a landlord who also has a self-employed business, the deciding factor isn't which software looks nicest. It's whether the platform can report both income streams from one subscription. Xero says one organisation can cover both (Xero); QuickBooks and FreeAgent both need two separate subscriptions instead.

Key pointers

Check your qualifying income against £50,000, which is turnover before expenses from self-employment and property combined, taken from your last tax return, not profit (HMRC).
Xero says one organisation can cover self-employment and property together; QuickBooks and FreeAgent both require two separate subscriptions for the same combination (Xero).
Budget the real monthly cost, not the entry price: roughly £7 on Xero, £20 on QuickBooks, £29 on FreeAgent once both income sources are covered.
Ask if you bank with NatWest, Royal Bank of Scotland, Ulster Bank or Mettle: FreeAgent gives you one free account per qualifying business bank account, so a mixed-income landlord pays for the second unless they hold a qualifying account for each business (FreeAgent).
There are no penalty points for a late quarterly update in the first year, 2026 to 2027, but the 31 January final return and payment deadlines are unchanged and can still be penalised (HMRC).
If you're VAT-registered on your self-employed side, budget for Xero Ignite at £18 a month or QuickBooks Simple Start at £16 a month instead, since Xero Simple and QuickBooks Sole Trader Plus don't include VAT submission.
Quarterly update deadlines are fixed by HMRC, not by the software: 7 August, 7 November, 7 February and 7 May, whichever platform you choose (HMRC).

How a landlord's combined income reaches Making Tax Digital software — HMRC combines self-employment and property income for the £50,000 threshold, but the three platforms handle that combined income differently.

What Making Tax Digital for Income Tax means for this landlord

If your rental income and your self-employment income add up to more than £50,000, HMRC combines them for the purpose of the April 2026 mandate, even though you'll file them as separate businesses within your software (Xero). Instead of one Self Assessment return a year, you'll send a quarterly update for your property business and a separate quarterly update for your self-employment, four times each (HMRC), then one final declaration by 31 January that covers both (HMRC).

That structure is why the choice between Xero, QuickBooks and FreeAgent matters more for a mixed-income landlord than for a landlord with property income alone. HMRC's rules let you keep both income sources inside one piece of software, but not every platform is built to do that inside a single subscription. Xero explicitly says you can manage multiple income streams, including a sole trade and a property business, "within one Xero organisation" (Xero). QuickBooks' own help centre says the opposite: "you will need a separate QuickBooks account for each business income source" (QuickBooks), and its support team confirms that on Sole Trader Plus "only one income source is allowed per account" (QuickBooks Community). FreeAgent takes the same two-account approach: "you'll need a sole trader and an unincorporated landlord account," and property income can't be recorded in a sole trader account at all (FreeAgent Support). Across the two accounts you'll still send four quarterly updates and one end-of-year update per income stream, then one final declaration covering everything (FreeAgent Support).

UK compliance mapping

The £50,000 threshold is qualifying income, meaning turnover before expenses, based on the tax return you already submitted, not your profit after costs (HMRC). A landlord with a large portfolio and thin margins can be well inside MTD even in a low-profit year.

HMRC has given the first year some slack. There are no penalty points for a late quarterly update in the 2026 to 2027 tax year, so missing one of the four in-year deadlines during that first year won't cost you a point (HMRC). That grace period does not extend to the final declaration or to paying what you owe: the 31 January deadline for both is unchanged, and from year two the points-based penalty applies to quarterly updates too, with a £200 fine once you reach four points (HMRC). This is not legal advice; consult your legal counsel.

Pricing and cost model

List prices, excluding VAT, as published by each vendor and checked on 29 September 2026. All three run promotional pricing for new customers, typically half to 90% off for the first six months, so budget from the list price for what you'll actually pay from month seven.

Platform	Plan for this landlord	List price	Current promo	What it covers
Xero	Simple	£7/month	£0.70/month for 6 months	Self-employment and property, said to fit in one subscription (Xero)
QuickBooks	Sole Trader Plus, x2	£10/month each, £20/month total	£1/month each for 6 months	A separate QuickBooks account for each income source (QuickBooks)
FreeAgent	Landlord + Sole Trader	£10 + £19 = £29/month	£5 + £9.50 = £14.50/month for 6 months	A dedicated Landlord account plus a separate Sole Trader account

Chart 1 shows the realistic monthly cost once both income sources are covered: £7 on Xero, £20 on QuickBooks (assuming Sole Trader Plus on both sides) and £29 on FreeAgent.

None of these figures is the final bill. Add VAT if you can't reclaim it, add £5 a month on FreeAgent if you go over ten receipt captures, and check whether you need VAT submission, which sits above the plans compared here on both Xero and QuickBooks. FreeAgent gives you one fully-funded account for as long as you retain a qualifying NatWest, Royal Bank of Scotland or Ulster Bank account, or make at least one transaction a month through Mettle, but a landlord who needs both a Landlord and a Sole Trader account only gets one of the two free unless they hold a qualifying account for each (FreeAgent).

Xero, QuickBooks and FreeAgent compared

Criterion	Xero (Simple)	QuickBooks (Sole Trader Plus x2)	FreeAgent (Landlord + Sole Trader)
Self-employment and property in one subscription	Yes	No, two subscriptions needed	No, two separate accounts needed
Whole rental portfolio in one property subscription	Yes	Yes, HMRC treats all UK properties under one owner as a single Property Business	Yes, including joint ownership splits
Realistic monthly list price for this landlord	£7	£20	£29
Free route through business banking	No	No	One account free per qualifying NatWest, RBS, Ulster Bank or Mettle account held; a second account still needs its own qualifying account or a paid subscription
VAT return submission on the cheapest plan	No, needs Ignite at £18/month	No, needs Simple Start at £16/month	Included as standard on the Sole Trader plan; not listed as a Landlord plan feature
Submissions for combined income	One final declaration from one organisation	Both accounts linked to one HMRC Personal Tax Account, reviewed and submitted together	Four quarterly updates and one end-of-year update per account, then one final declaration covering both

Xero suits a landlord who wants the lowest ongoing bill and doesn't want to run two separate subscriptions for one final declaration. QuickBooks suits someone who'd rather keep the property business and the trading business fully ring-fenced, and doesn't mind two invoices. FreeAgent suits a landlord who already banks with NatWest Group for at least one of the two businesses, cutting the two-account cost to one paid subscription, or one who wants dedicated landlord tooling such as per-owner joint ownership splits.

Editorial analysis

None of these platforms is wrong for MTD compliance; all three are built to submit quarterly updates and a final declaration to HMRC. The practical difference for a landlord with mixed income is administrative rather than technical. Running two subscriptions on QuickBooks or FreeAgent means two logins, two bank feeds to set up, two support relationships and two renewal dates to track, even though the properties themselves can sit together in one of those accounts. That overhead is worth a look before price alone decides it, because the promotional pricing on all three narrows the gap in year one and widens it again from month seven. A landlord who already banks with NatWest Group has the strongest case for accepting the two-account structure, since one of the two FreeAgent accounts is free and only the second needs paying for.

Sources

Data & Insights

Realistic monthly cost for combined self-employment and property income

List price excluding VAT once both income sources are covered, before any promotional discount.

View the data

Realistic monthly cost for combined self-employment and property income
Category	Monthly cost excl. VAT
Xero (1 subscription)	£7.00
QuickBooks (2 subscriptions)	£20.00
FreeAgent (2 accounts)	£29.00

Source: Xero, QuickBooks and FreeAgent UK pricing pages

MTD for Income Tax mandatory income threshold by year

The qualifying income threshold for mandatory Making Tax Digital for Income Tax falls in phases.

View the data

MTD for Income Tax mandatory income threshold by year
Category	Qualifying income threshold
April 2026	£50,000.00
April 2027	£30,000.00
April 2028	£20,000.00

Source: HMRC

Frequently Asked Questions

Does my rental income count towards the £50,000 threshold even if it's below my self-employment income on its own?

Yes. HMRC adds your qualifying income from self-employment and property together, so a landlord with, say, £30,000 in self-employment income and £25,000 in rental income is inside MTD for Income Tax from April 2026, even though neither figure alone reaches £50,000 (HMRC).

Will I be fined if I miss a quarterly update in the first year?

Not through the penalty points system. HMRC has said there are no penalty points for a late quarterly update in the 2026 to 2027 tax year (HMRC). Your final return and any tax payment are still subject to the usual 31 January deadline and its penalties, so the concession only covers the in-year updates.

Can I use one QuickBooks or FreeAgent subscription for several rental properties?

Yes. HMRC treats all UK rental properties held under the same ownership as a single Property Business, so one property-side subscription on either platform covers the whole portfolio, not one subscription per house (QuickBooks Community).

Is Xero's Simple plan enough if I'm VAT-registered on my self-employed side?

No. Xero's Simple plan doesn't list VAT return submission among its included features; you'd need to move up to Ignite at £18 a month excluding VAT or higher, which also carries MTD for Income Tax (Xero). The same applies to QuickBooks Sole Trader Plus, where VAT submission needs Simple Start at £16 a month or above (QuickBooks).

Does FreeAgent's free banking offer apply to landlords, or only limited companies?

It applies to landlords, but only to one account. FreeAgent gives you one fully-funded account per qualifying NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business account, and that covers any of its business types including the Landlord plan. A landlord who also needs a Sole Trader account for self-employment income needs a second qualifying bank account to get that free too, otherwise it's paid (FreeAgent).

How does FreeAgent handle my tax return if my property income and self-employment income sit in two separate accounts?

For MTD for Income Tax, FreeAgent says each account handles its own four quarterly updates and end-of-year update, but describes one final declaration that covers all your income sources for the tax year (FreeAgent Support). Outside MTD, on the older annual Self Assessment route, FreeAgent says you can only submit from one account, and you'd need to manually enter the other business's figures into that submission (FreeAgent).

Back to All Articles

MTD for Income Tax is mandatory from 6 April 2026 for combined self-employment and property income over £50,000, dropping to £30,000 in April 2027 and £20,000 in April 2028 (HMRC).
Xero Simple costs £7 a month excluding VAT, currently discounted to £0.70 a month for six months for new UK customers (Xero), and Xero says one organisation can cover both self-employment and property (Xero).
QuickBooks Sole Trader Plus costs £10 a month excluding VAT (£1 for six months on the current offer). QuickBooks' own help centre says a landlord with a self-employed business needs a separate QuickBooks account for each income source (QuickBooks).
If both accounts are Sole Trader Plus, that's roughly £20 a month excluding VAT before any promotional discount; QuickBooks doesn't publish which tier a larger portfolio needs on the property side (QuickBooks Community).
FreeAgent's Landlord plan is £10 a month excluding VAT, £5 for six months (FreeAgent), and its Sole Trader plan is £19 a month excluding VAT, £9.50 for six months (FreeAgent); combined income needs both.
FreeAgent gives you one fully-funded account per qualifying NatWest, Royal Bank of Scotland, Ulster Bank or Mettle business current account, on any of its business types, but a landlord with two FreeAgent accounts needs a second qualifying account to get both free (FreeAgent).
HMRC treats all UK rental properties under the same ownership as a single Property Business, so one property subscription covers a whole portfolio on QuickBooks or FreeAgent (QuickBooks Community).
Quarterly updates are summaries, not tax returns, and must still be sent even with no income or expenses in the period (HMRC).
The final declaration and any tax owed are still due by 31 January after the tax year ends, replacing the old Self Assessment return (HMRC).
Late submission penalties are points based, four points trigger a £200 fine, and a further £200 for every late submission after that (HMRC).
Xero's Simple plan and QuickBooks' Sole Trader Plus plan both exclude VAT return submission, which sits on a higher tier for each (Xero); FreeAgent's Sole Trader plan lists VAT return submission as a standard feature (FreeAgent).