MTD and Your Accountant: How the Relationship Changes in 2026

For decades, the relationship between landlords and their accountants has followed a familiar pattern. You collect receipts throughout the year, stuff them into a folder or carrier bag, and hand them over sometime after April. Your accountant then spends hours sorting through everything, entering figures into their system, and filing your Self Assessment return. You pay their fee, breathe a sigh of relief, and repeat the cycle twelve months later. It is a system that has worked — or at least felt like it worked — for generations of property investors.

Making Tax Digital is about to fundamentally change that dynamic. From April 2026, landlords with qualifying income above £50,000 will need to keep digital records and submit quarterly updates to HMRC throughout the year. Phase 2 follows in April 2027 for those earning above £30,000, and Phase 3 in April 2028 for income above £20,000. This shift from annual to quarterly reporting does not just change your compliance obligations — it transforms the very role your accountant plays in your property business and raises important questions about what you should be paying for.

Whether you currently rely heavily on an accountant or handle most things yourself, understanding how this relationship is evolving will help you make better decisions about your time, your money, and your MTD compliance strategy. In this guide, we break down exactly what changes, what it means for fees, when you can manage without professional help, and how to have the right conversations before April 2026 arrives.

What Accountants Used to Do for Landlords

The traditional accountant-landlord relationship was built around a once-a-year sprint. Most landlords would accumulate their financial records over the course of the tax year — April to April — then pass everything to their accountant in a single batch. The accountant's job was predominantly manual: sorting receipts, categorising expenses, reconciling bank statements, calculating allowable deductions, and preparing the Self Assessment return for submission to HMRC.

For many landlords, particularly those with smaller portfolios of one to three properties, the accountant effectively acted as both bookkeeper and tax adviser rolled into one. You might pay anywhere from £250 to £600 for this annual service, depending on the complexity of your portfolio and where in the country your accountant was based. London and South East firms typically charged towards the higher end, while practices in the Midlands and North were often more affordable.

The accountant handled the data entry grunt work — typing up your rental income figures, entering each expense line by line, reconciling what your bank statements showed against what your receipts said. They then applied their tax knowledge to ensure you claimed everything you were entitled to. This included making sure you were correctly claiming mortgage interest relief (now restricted to basic rate for individual landlords), repairs and maintenance deductions, insurance costs, letting agent fees, and the various other allowable expenses that reduce your tax bill.

This model worked because HMRC only needed to hear from you once a year. There was no requirement to maintain real-time digital records, no quarterly deadlines to hit, and no obligation to use compatible software. Your accountant was the single point of contact between you and HMRC, and the entire process could be compressed into a few weeks of activity each year. Many accountants would not even look at your records until several months after the tax year ended.

There was also a significant knowledge asymmetry built into this model. Your accountant understood the tax rules, the allowable expense categories, the various reliefs and allowances, and the filing mechanics. You did not need to understand any of it — you just needed to hand over your records and trust them to get it right. For landlords with straightforward portfolios, this arrangement was convenient, relatively affordable, and required minimal engagement with the detail of property taxation.

However, this convenience came at a cost that many landlords did not fully appreciate. Because you only engaged with your finances once a year, you often had no idea how your properties were performing until months after the tax year ended. If you had been overpaying for insurance, missing allowable deductions, letting void periods drag on too long, or undercharging rent relative to the local market, you would not find out until long after the opportunity to act had passed. Your accountant saw the numbers but typically only in the context of tax compliance, not business performance.

How MTD Changes the Workflow

Under Making Tax Digital for Income Tax Self Assessment (MTD for ITSA), the annual data dump becomes obsolete. Instead, you need to maintain digital records continuously and submit quarterly updates to HMRC showing your income and expenses for each three-month period. At the end of the tax year, you then submit a final declaration — effectively replacing the Self Assessment return you have been filing for years.

This quarterly cadence changes everything about how the work gets done. Records need to be kept up to date throughout the year, not reconstructed from memory and crumpled receipts in January. Expenses need to be categorised as they occur — you cannot leave a year's worth of transactions to be sorted in one go. Income needs to be logged when it is received. The days of handing over a carrier bag of receipts are genuinely and irrevocably over.

The quarterly update deadlines follow the tax year quarters. For the standard tax year running 6 April to 5 April, your four quarterly periods end on 5 July, 5 October, 5 January, and 5 April. Each quarterly update must be submitted to HMRC by the deadline for that period. After the fourth quarter, you have until 31 January of the following year to submit your final declaration and make any year-end adjustments — similar to the existing Self Assessment deadline, but with a full year of digital records behind it.

For accountants, this means the old model of doing everything in one annual burst no longer works. They either need to engage with your records four times a year (plus the final declaration), which represents a fundamental change to their workflow, or they need you to take on the ongoing record-keeping yourself using MTD-compatible software. Either way, the division of labour between landlord and accountant is shifting significantly.

There is also a technology requirement that did not exist before. All records must be maintained in MTD-compatible software, and quarterly updates must be submitted digitally through HMRC's Application Programming Interface (API). Spreadsheets are acceptable for record-keeping only if they are linked to compatible bridging software that handles the digital submission. Your accountant cannot simply type your figures into HMRC's website as they might have done with Self Assessment — the submission must come from approved software.

Perhaps most importantly, the penalties regime is changing too. HMRC is introducing a points-based system for late submissions and late payments. Each missed quarterly deadline earns a penalty point, and once you accumulate enough points, financial penalties apply. This means the consequences of missing a deadline are no longer a distant, once-a-year concern — they are a quarterly reality that needs active management.

Before and After: Who Does What

The table below illustrates how core tasks shift under MTD. In many cases, work that was previously done entirely by your accountant now becomes a shared responsibility — or moves to you entirely. Understanding this shift is essential for negotiating fair fees and setting realistic expectations on both sides.

The key shift is clear: routine data entry and ongoing record-keeping move from the accountant to the landlord (assisted by software), while the accountant's role moves towards review, advisory, and strategic tax planning. This is not a bad thing — it means you get more value from your accountant's genuine expertise rather than paying a qualified professional to type numbers into a spreadsheet.

Think of it this way: before MTD, you were paying a qualified tax professional to do work that software can now handle automatically. After MTD, you pay them for the expertise that software genuinely cannot replace — understanding the nuances of property tax law, identifying planning opportunities specific to your circumstances, ensuring your expense claims are robust and defensible, and providing guidance when your situation changes.

This shift also means you will have a much better understanding of your own finances. When you are the person entering the income and expenses, you see the patterns. You notice when void periods are costing you money, when a particular property is underperforming, or when expenses are creeping up. This visibility is a genuine benefit of MTD, even if the compliance obligation itself feels like a burden.

What to Expect From Accountant Fees Under MTD

Let us address the question every landlord is asking: will my accountant's fees go up? The honest answer is that it depends entirely on how you structure the relationship going forward, but many landlords should expect some change in both what they pay and what they receive for that payment.

If you continue to rely on your accountant for everything — maintaining your records, reviewing them quarterly, submitting updates, and handling the final declaration — then yes, fees are very likely to increase. Your accountant is now doing substantive work five times a year instead of once. They need to review your records each quarter, check for errors or missing data, ensure the categorisation is correct, submit the update to HMRC, and deal with any queries or discrepancies. That is a fundamentally more intensive service than the old annual model.

Industry estimates suggest fees for a fully accountant-managed MTD service could range from £600 to £1,500 per year for a typical landlord with a small to medium portfolio, compared with £250 to £600 under the old annual Self Assessment model. Larger or more complex portfolios could see fees above £2,000 per year for comprehensive MTD management.

However, if you take on the day-to-day record keeping yourself using MTD-compatible software and only involve your accountant for year-end review and the final declaration, the fee increase may be much more modest. Some accountants are already offering tiered MTD packages to reflect different levels of involvement:

• Full-service MTD management (quarterly submissions + final declaration + ongoing support + record review): £800 to £1,500+ per year
• Review-only service (you maintain records and submit quarterly updates yourself, accountant reviews year-end data and files final declaration): £400 to £800 per year
• Advisory-only retainer (you handle everything in software, accountant available for ad hoc tax questions, year-end review, and planning): £200 to £500 per year
• One-off MTD setup consultation (getting you started with software, configuring expense categories, reviewing your first quarter, answering questions): £150 to £300 as a one-time fee

The fee variation is significant, and it largely depends on how much of the routine work you are prepared to do yourself. A landlord who keeps clean digital records throughout the year, categorises their expenses promptly, and submits their own quarterly updates gives their accountant far less to do at review time — and can expect to pay accordingly. A landlord who wants their accountant to log into the software, check every transaction, and handle all submissions is asking for a materially more intensive service.

It is also worth noting that some accountants are using MTD as an opportunity to restructure their practices entirely. Rather than charging a flat annual fee, some are moving to monthly retainers (for example, £50 to £100 per month for ongoing access to advice and quarterly review). Others are bundling MTD compliance with broader advisory services, offering packages that include tax planning, property investment advice, capital gains tax guidance, and business structuring alongside the core compliance work.

The important thing is transparency. Whatever your accountant proposes, make sure you understand exactly what is included and what would cost extra. Will they chase you before each quarterly deadline, or is that your responsibility? Does the fee include correcting errors you make in your record-keeping, or are corrections charged separately? Is tax planning advice included or billed at an hourly rate on top? Get this in writing before April 2026.

When You Can Go Software-Only

Not every landlord needs an accountant under MTD. If your property affairs are relatively straightforward, MTD-compatible software can handle the entire process — from digital record keeping through to quarterly submissions and the final declaration. The software does the heavy lifting that accountants used to do manually, and in many cases it does it faster, more consistently, and more affordably.

You are likely a good candidate for a software-only approach if your situation matches most of the following criteria:

• You own one to three rental properties with standard assured shorthold tenancy arrangements and straightforward lease terms
• Your income sources are limited to rental income and perhaps employment income (which is handled separately by your employer via PAYE and does not need to be included in your MTD submissions)
• You claim standard allowable expenses — mortgage interest relief (at the basic rate), repairs and maintenance, buildings and contents insurance, letting agent fees, ground rent, service charges, accountancy fees — without complex or aggressive tax planning
• You do not have a limited company structure for your property holdings and are not considering incorporation
• You are comfortable using digital tools — whether that is a web application on your laptop or a mobile app on your phone — and can commit to keeping records up to date on a regular basis
• You do not have overseas properties, non-UK tax residency complications, or furnished holiday letting income that requires separate treatment
• You are not planning any major transactions in the near term — such as property sales (which trigger capital gains tax), transfers between spouses, or significant portfolio restructuring

For landlords in this category, using software like Latch can be significantly more cost-effective than paying an accountant for full MTD management. The software handles the digital record keeping requirements that HMRC mandates, prepares your quarterly updates with your income and expenses correctly totalled, and guides you through the submission process step by step.

The financial case is straightforward and compelling. If your accountant would charge £800 to £1,500 per year for full MTD management, and Latch's free plan covers the core MTD compliance features — income and expense tracking, manual categorisation, and quarterly update preparation — the savings can be substantial. Over five years, the difference could amount to several thousand pounds that you could redirect into property improvements, mortgage overpayments, or simply keep as additional profit.

Many landlords in this category also find that managing their own records gives them a better understanding of their property business. When you are the person logging every income receipt and expense payment, you develop an intuitive feel for how each property is performing, which costs are rising, and where there might be opportunities to improve profitability. That awareness is valuable in its own right.

When You Still Need an Accountant

There are situations where professional advice is not just helpful but genuinely important — and in some cases essential to avoid expensive mistakes. MTD changes the nature of the accountant's work, but it does not eliminate the need for expert guidance in complex scenarios. In fact, for landlords with complicated tax affairs, the value of a good accountant may actually increase under MTD because they now have access to real-time data that enables proactive rather than retrospective advice.

You should strongly consider keeping an accountant — or engaging one for the first time — if any of the following apply to your situation:

• You own properties through a limited company — MTD for ITSA does not currently apply to companies directly, but Corporation Tax digitalisation is expected separately, and the interaction between personal and company tax (dividends, director's loans, salary vs dividend decisions) requires careful ongoing planning
• You have a large portfolio of five or more properties with varied income streams, different void patterns, a mix of single lets and HMOs, and complex expense structures that require careful categorisation
• You jointly own properties with a spouse, civil partner, or business partner and need to manage income splits correctly — particularly where Form 17 declarations of beneficial interest are involved or being considered
• You have mixed income sources — rental income, self-employment income, dividend income, overseas income, pension income — that interact for tax purposes and could push you into different tax bands or trigger the personal allowance taper
• You are considering incorporating your property business or restructuring the ownership of your portfolio, which involves capital gains tax, stamp duty land tax, and potentially inheritance tax implications that need expert modelling
• You have capital gains tax considerations from actual or planned property disposals, including the 60-day reporting requirement for UK residential property gains
• You want proactive tax planning to minimise your liability within the law — for example, timing repairs to maximise deductions, structuring mortgage arrangements tax-efficiently, or optimising the use of personal allowances between spouses
• You are a higher-rate (40%) or additional-rate (45%) taxpayer where the financial stakes of getting things wrong are significantly higher — a single missed deduction or incorrectly claimed expense could cost hundreds or thousands of pounds

In these cases, the value of an accountant under MTD actually increases. Because your records are now digital and up to date throughout the year, a good accountant can provide timely, actionable advice rather than retrospective number-crunching. They can spot opportunities and risks as they emerge rather than discovering them months after the tax year has ended and the chance to act has passed.

For example, if your accountant can see in October that your rental income for the year is tracking higher than expected and is likely to push you into the higher-rate tax band, they might advise you to bring forward planned maintenance expenditure into the current tax year to reduce your taxable profit. Under the old annual model, this kind of in-year planning was nearly impossible because neither you nor your accountant had a clear real-time picture of where you stood.

Similarly, if you are approaching a property sale, your accountant can use your real-time income data to model the capital gains tax implications with far greater accuracy, helping you time the sale to minimise the tax impact. This is the kind of proactive advisory work that justifies ongoing accountancy fees — and it only becomes possible when digital records provide a live view of your financial position.

Questions to Ask Your Accountant About MTD

If you currently use an accountant, now is the time to have a frank and detailed conversation about how MTD will affect your working relationship. Do not assume your accountant has a fully developed plan — some firms, particularly smaller high street practices, have been slow to prepare for MTD despite years of advance notice from HMRC. Here is a checklist of questions to raise at your next meeting or in a dedicated MTD planning call:

• Are you registered as an MTD-compatible agent with HMRC, and which MTD-compatible software platforms do you support or recommend for landlord clients?
• What will your MTD service cost compared to my current annual fee? Can you provide a written breakdown of what is included at each price tier, and what would be charged as extras?
• Do you expect me to maintain my own digital records throughout the year, or will you handle the day-to-day record-keeping as part of your service?
• If I use my own MTD-compatible software (such as Latch), can you access my records through it for review purposes, or would you need me to export data in a specific format each quarter?
• How will quarterly deadlines work in practice? Will you proactively contact me before each deadline to review and submit, or do I need to manage the calendar and prompt you?
• What happens if I miss a quarterly submission deadline? What penalties apply under the new HMRC regime, and does your service include deadline management to help me avoid them?
• Can you help me set up my digital records and software correctly before April 2026 so that I am fully ready from day one? Is there a separate fee for this setup and onboarding work?
• Will your advisory services evolve now that you will have access to my real-time financial data? For example, will you offer in-year tax planning recommendations or proactive suggestions based on what my quarterly figures show?

The answers to these questions will tell you a lot about how prepared your accountant is and how much value you will get from the relationship going forward. A well-prepared accountant will have clear, confident answers, transparent pricing with no hidden charges, and a genuine understanding of how MTD-compatible software works in practice. They will have already tested their processes with pilot clients and will be able to walk you through exactly how each quarter will work.

If your accountant is vague about MTD, dismissive of the changes, unfamiliar with compatible software, or unable to give you a clear pricing structure, that is a significant red flag. MTD has been in development since 2015 and has been confirmed in its current form for years. Any accountant who is not ready by now may not be the right partner for this new phase of property tax compliance.

How Latch Fits Into the Picture

Latch is designed to meet HMRC MTD requirements for landlords, whether you work with an accountant or manage your compliance independently. The platform handles the core digital record-keeping obligations that MTD imposes — tracking rental income as it comes in, logging expenses as they occur, and preparing your quarterly updates with correctly categorised and totalled figures — so that your data is always submission-ready when each deadline arrives.

For landlords who work with accountants, Latch provides a shared view of your property finances that both you and your accountant can access. Your accountant can review your digital records at any time, verify that your categorisations are correct and HMRC-compliant, check for any missing or miscategorised transactions, and handle the final declaration with confidence that the underlying data is accurate and complete. This reduces the time your accountant needs to spend on your affairs — which can directly translate into lower fees and a more efficient working relationship.

For landlords going software-only, Latch's free plan includes the core MTD compliance features you need to get started: income and expense tracking, manual categorisation of your transactions into the correct HMRC expense categories, and quarterly update preparation. These features cover the fundamental digital record-keeping obligations that MTD imposes on all qualifying landlords, without requiring you to pay for professional assistance.

If you need more advanced capabilities — such as AI-powered expense categorisation that automatically assigns HMRC-compliant categories to your transactions based on their descriptions, unlimited properties for larger portfolios, or detailed reporting for deeper financial insight into your portfolio's performance — paid plans start from £20 per month. These features are designed for landlords who want to save time and extract more value from their data, but they are not required for basic MTD compliance.

The key point is flexibility. Whether you want a fully accountant-managed approach where your accountant uses Latch as their review and submission tool, a hybrid model where you handle the day-to-day record-keeping and your accountant reviews periodically before each submission, or a fully independent software-only approach where you manage everything yourself — Latch supports all three working styles without locking you into one.

Making the Transition: A Practical Timeline

If you are in Phase 1 (qualifying income above £50,000), you need to be ready by April 2026. That means the transition work should be happening now — not in March when everyone is scrambling. Here is a practical timeline for getting your accountant relationship and MTD compliance sorted:

• Now (early 2026): Have the MTD conversation with your accountant. Understand their plans, their pricing, and what they expect from you. If they are not ready or their fees have increased beyond what you consider reasonable, start looking at alternatives — either other accountants or a software-only approach.
• February to March 2026: Set up your MTD-compatible software. Enter your property details, configure your expense categories based on HMRC's allowable expense list, and start recording current transactions digitally — even if your MTD obligation has not technically started yet. This gives you practice with the workflow.
• March 2026: Run a trial quarter. Use your software to record a full quarter's worth of income and expenses as if you were already under MTD. If you have an accountant, share the output with them for review. This dry run will expose any gaps in your process, categories you have set up incorrectly, or transactions you are not sure how to handle.
• April 2026: Go live. Your first MTD quarter begins on 6 April. By now, you should know exactly who does what — you or your accountant — and your software should be fully set up, tested, and populated with your property details.
• 5 July 2026: First quarterly update due to HMRC. This is the real test. If your process works smoothly and the submission goes through without issues, you are set for the remaining quarters. If not, you have time to adjust your approach before the next deadline on 5 October.
• Ongoing: Each quarter, review your process. Are you keeping records up to date, or are you falling behind and having to catch up before each deadline? If the latter, consider whether adjusting your workflow or upgrading your software features (such as AI-powered categorisation) might help.

The Bottom Line