How to Choose MTD-Compatible Software: A Compliance Selection Checklist for 2026

Making Tax Digital for Income Tax (MTD for ITSA) requires taxpayers within scope to keep digital records and submit via compatible software. If you need to implement software, choose a tool that is compliant and reduces day-to-day admin. The checklist below follows HMRC guidance and is written as a practical selection checklist for sole-traders and landlords

1) Verify core compliance 

Your software should allow you to:

• Create, store and correct digital records for income and expenses.

• Send quarterly updates for each income source.

• Consider software that also supports submitting your tax return by 31 January, so you can complete everything in one place (not a must-have, as this can be done in a separate MTD-compatible app or by your agent).

Action for you: Ask the vendor to confirm these three capabilities in writing for all income sources you need (sole-traders or landlords) 

2) Decide between all-in-one or a connected “stack”

HMRC allows two approaches:

• a single, end-to-end product that covers digital records, quarterly updates and the tax return, or

• multiple products connected by compliant digital links (e.g., spreadsheets with bridging software).

That setup is possible, but a dedicated end-to-end app is usually the better choice because:

• Fewer moving parts = fewer failures. One system reduces breakpoints between tools, keeps a cleaner audit trail and lowers the risk of broken links before a deadline.

• Built-in validation and guidance. A unified app can flag category errors, missing periods and authorisation issues in real time, helping you file accurate updates and your tax return on time.

• Single vendor accountability. One support team responsible for the whole workflow (records → updates → year-end) speeds issue resolution and avoids “blame the other tool” loops.

If you’re looking for EasyInvoice for landlords and sole traders in the UK, download the app today

3) Confirm support for your update periods and accounting method

Software must work with your chosen update periods (standard tax-year alignment or calendar update periods). You select this at the start of the tax year. Ensure the product also supports your accounting method (cash or traditional/accruals).

What to check: Where you set update periods during setup, and what safeguards exist to avoid mis-configuration.

4) Coverage for other income you must report

You keep digital records for self-employment and property, but your tax return still includes other income (PAYE, savings interest, dividends, pensions, partnerships). Your software should let you add these so you can complete your tax return.

Action for you: If your income mix may change, verify that adding or removing sources later is supported.

5) In-year visibility and clear year-end workflow

After each quarterly update, you should be able to view an in-year tax estimate and identify issues early. The product should guide you from quarterly updates through year-end adjustments and the tax return.

Vendor check: Ask to see the in-product journey from Q1 update → year-end adjustments → tax return.

6) Multiple businesses and jointly-let property

If you have more than one trade or property business, your software should keep them separate and manage the correct quarterly submissions. For jointly-let property, you may choose to submit income only during the year and add expenses at year end – your tool should support that choice.

What to check: Separate ledgers/income sources, and configurable options for jointly-owned property.

7) Data portability (easy export)

You should be able to export your digital records in usable formats including categories and, ideally, attachments or audit trails. This matters if you switch providers or cease trading.

8) Practical onboarding and deadline readiness

Look for setup guidance aligned to HMRC’s steps (choose software → authorise → create digital records → send updates → submit return). Confirm support coverage around deadline months (August/November/February/May).

Action for you: Ask about support channels/hours, response targets, and any onboarding checklists.

9) Pricing and plans that fit how you pay

Some products offer only annual plans; others provide monthly and annual options. Choose pricing that fits cash flow and check for add-ons (extra businesses, additional submissions, storage).

Vendor check: Clarify what’s included in each plan and whether you can switch plans without penalty.

Concise Selection Checklist

• Supports digital records, quarterly updates, and tax return for your income sources.

• Implements compliant digital links (no manual copy-paste).

• Handles your update periods (standard or calendar) and accounting method.

• Provides in-year tax estimates and support for year-end adjustments and your tax return.

• Manages multiple trades/properties and jointly-owned property options.

• Delivers robust data export

• Clear onboarding, documentation, and deadline-period support.

• Transparent monthly and annual pricing without hidden add-ons.

• Security, uptime, and a published update/roadmap cadence.

Why EasyInvoice aligns with this checklist

EasyInvoice is built for UK sole traders and landlords who want simple invoicing and MTD records without a full accounting package. The invoices you already send become your digital records. You can add other income and expenses, check each quarterly update before you send it to HMRC, and see when HMRC has received it. After you send an update, you can view HMRC’s tax estimate. You send your own quarterly updates in EasyInvoice, and you can ask an accountant to prepare your tax return. EasyInvoice Premium works on iOS and in your web browser, and it is for UK businesses that are not VAT registered. Product support only, not tax advice.

Compare EasyInvoice pricing and plans before you start the free trial.