Latch vs Xero for MTD: General Accounting vs Purpose-Built Landlord Software
Xero is powerful accounting software with MTD support. But is it the right choice for landlords? Compare Xero's generic MTD with Latch's landlord-specific MTD compliance.
The Latch Team
Editorial
Xero is one of the most popular cloud accounting platforms in the UK, trusted by hundreds of thousands of businesses and their accountants. It supports Making Tax Digital for both VAT and Income Tax, making it a natural consideration for landlords approaching their MTD obligations.
But Xero is a general accounting tool. It was not built for landlords. There are no property-specific workflows, no compliance tracking for Gas Safety or EICR certificates, and no concept of tenants or leases. You can make it work for rental accounting, but it requires manual setup and accounting knowledge.
Latch is purpose-built for UK landlords with MTD compliance included free for up to 3 leases. This comparison examines whether a general accounting giant or a specialist landlord platform is the better choice for MTD compliance.
Quick MTD Comparison: Latch vs Xero
| Feature | Latch | Xero |
|---|---|---|
| Free MTD Access | Yes — free for up to 3 leases | No — no free tier, from £15/month |
| Built for Landlords | Yes — property-specific workflows | No — general business accounting |
| Digital Record Keeping | Yes — landlord-focused categories | Yes — full double-entry accounting |
| Quarterly Submissions | Yes — quarterly summary generation | Yes — MTD quarterly filing |
| HMRC API Integration | Yes — direct HMRC submission | Yes — direct HMRC submission |
| Bank Feed Integration | Yes — Open Banking | Yes — Open Banking with 800+ integrations |
| AI Categorisation | Yes — Matt the AI agent (paid plan) | Rule-based auto-categorisation |
| Property Compliance | Yes — Gas, EICR, EPC, deposit tracking | No — no property compliance features |
| Tenant Management | Yes — full tenant and lease lifecycle | No — no tenant features |
| Property-Level Reporting | Yes — built-in per-property P&L | Possible but requires manual tracking code setup |
| App Ecosystem | Focused landlord tools | 800+ third-party integrations |
MTD Pricing Comparison
Latch Free
£0
forever
Up to 3 leases, all core MTD features
Latch Pro
£20
per month
Up to 8 leases, Matt AI agent, full property management
Xero Starter
£15
per month
Basic accounting, limited invoices and bills
Xero Standard
£30
per month
Unlimited invoices, bank reconciliation, bills
Xero Premium
£42
per month
Multi-currency, expense claims, project tracking
Xero's pricing starts at £15 per month (£180 per year) with no free tier. For a landlord with 1 to 3 properties who only needs MTD compliance, that is a significant cost for software that still requires manual property accounting setup. Latch offers free MTD compliance for the same portfolio size.
Most landlords would need the Standard plan at £30 per month (£360 per year) to access unlimited bank reconciliation — a core requirement for MTD. That exceeds Latch Pro pricing while offering no landlord-specific features.
Hidden cost: Xero's headline price does not include the time cost of setting up property-specific tracking codes, chart of accounts, and reporting. With Latch, property-level accounting works out of the box.
MTD Feature Deep Dive
Digital Record Keeping
Xero's accounting engine is world-class. Double-entry bookkeeping, bank reconciliation, invoicing, and financial reporting are all superb. For landlords, you would create tracking categories for each property, set up rental income accounts, and configure expense categories to match HMRC requirements. It works but it requires accounting knowledge to configure properly.
Latch provides landlord-specific digital records from the start. Add your properties, connect your bank, and categorise transactions into HMRC-required categories using guided workflows. No chart of accounts configuration needed.
Quarterly Submissions
Both platforms support direct MTD quarterly submissions to HMRC. Xero has extensive experience with MTD for VAT and has extended this to Income Tax Self Assessment. Latch generates quarterly summaries specifically formatted for landlord rental income and expenses.
Property-Level Tracking
This is where Xero requires the most setup effort. To track income and expenses by property, you must:
- Create tracking categories for each property
- Assign every transaction to the correct property tracking code
- Build custom reports to view per-property profit and loss
- Manually ensure each property's data is correct for tax purposes
In Latch, every transaction is automatically associated with a property. Per-property reporting, rent rolls, and expense breakdowns are built in. No manual tracking code assignment required.
Landlord-Specific Features
Xero is a powerful accounting platform with no understanding of landlord-specific needs. There is no concept of tenants, leases, rent schedules, compliance certificates, or property maintenance. You manage those aspects outside Xero and record the financial outcomes inside it.
Latch integrates property management with MTD compliance. Compliance certificates, tenant records, lease terms, and maintenance costs all feed into your digital records automatically. This means your MTD submissions reflect your complete property operations, not just the transactions you remembered to categorise.
Xero MTD Pros and Cons
Xero MTD
Pros
- World-class accounting engine with double-entry bookkeeping
- Extensive experience with MTD (VAT and Income Tax)
- 800+ app integrations for extended functionality
- Widely used by UK accountants — easy collaboration
- Direct HMRC API integration
- Excellent bank reconciliation tools
Cons
- No free tier — from £15/month (£180/year minimum)
- Not landlord-specific — requires manual property accounting setup
- No property compliance tracking
- No tenant management, lease tracking, or maintenance features
- Property-level reporting requires tracking code configuration
- Steep learning curve for non-accountants
Latch MTD Pros and Cons
Latch MTD
Pros
- Free MTD compliance for up to 3 leases
- Purpose-built for UK landlords — works out of the box
- Property-level tracking built in, no configuration needed
- Full compliance suite (Gas, EICR, EPC, deposits) alongside MTD
- AI-powered categorisation via Matt on paid plans
- Direct HMRC API integration
Cons
- Free tier capped at 3 leases
- Less accounting depth than Xero (no double-entry, no invoicing)
- Smaller app ecosystem
- AI features require paid plan
- Fewer accountant collaboration tools than Xero
The Latch Approach: Why We Made MTD Free
We built Latch specifically for landlords. When MTD became mandatory, we had a choice: charge for compliance like everyone else, or make the basic tools free. We chose free because MTD is a government mandate, not a luxury feature.
Xero is an excellent accounting platform, but it asks landlords to pay £180 or more per year and then configure property tracking themselves. Latch gives you landlord-specific MTD compliance from day one at zero cost for up to 3 leases.
Verdict
Latch vs Xero for MTD
If you already use Xero for business accounting and your accountant prefers it, adding rental property tracking to your existing Xero setup makes sense. But if you are a landlord whose primary need is MTD compliance for rental income, Latch offers a simpler, cheaper, and more landlord-focused solution. For 1 to 3 properties, Latch is free where Xero costs a minimum of £180 per year.
Best for: Latch is best for landlords wanting simple, free, purpose-built MTD compliance. Xero is best for landlords who already use it for other business accounting or whose accountants require it.
Purpose-Built MTD for Landlords — Free
Skip the accounting setup. Latch gives you landlord-specific MTD compliance out of the box. Free for up to 3 leases, no credit card required. Upgrade for Matt the AI agent and unlimited properties.
Ready to simplify your property management?
Create your free account today and see how organized financial tracking can streamline your portfolio.
Get Started with LatchDisclaimer: This article provides general information about MTD software options and pricing. It does not constitute tax advice. Software pricing is based on published rates as of February 2026 and may change. Consult a qualified accountant or tax adviser for advice specific to your circumstances.
