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4 factors you can’t ignore when choosing MTD software for your unincorporated landlords

20th Sep 2022
Brought to you by
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Coconut’s simple bookkeeping and tax app is specifically designed for sole traders, helping them...
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The pressure is on to move your unincorporated landlords onto digital accounting solutions. Here are the four most important factors to consider to make the right choice for your firm and your clients.

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The countdown for MTD ITSA ticks ever onwards and for some clients, the choice of which software to use can be trickier than for others. One of the biggest—and least discussed—affected groups is non-professional landlords, who account for more than four fifths (85%) of landlords operating as individuals in England

From April 2024, landlords using the current Self Assessment process will have to switch to using a digital system for their tax returns if their property income (or any other qualifying income) totals over £10,000 per year. However, bringing these individuals into compliance can be a challenge—neither sole traders nor professional landlords, they require their own approach and software. Here’s how to work out the best MTD software for unincorporated landlords.

Want to find out more? Check out our new guide, The Landlord that Software Forgot to find out how you can manage the compliance needs of your non-professional landlord clients in time for MTD ITSA. 

Diagnosing the needs of non-professional landlords

We’ve dug into the needs of non-professional landlords in more detail in other articles, but the core challenge is that they sit between multiple categories. For the majority of these individuals, property is not their main source of income—but they still require the visibility and control to be able to integrate their landlord obligations with the rest of their personal and professional lives. 

And just because these aren’t professional landlords, it doesn’t necessarily mean their needs are simple, partly due to the way HMRC deals with property income. For example, HMRC stipulates different rules for transactions around four key property types:

  • UK property (not FHL)
  • UK FHL
  • Overseas property (not EEA FHL)

Each category has a set range of allowable expenses, meaning that landlords with mixed portfolios or usage agreements for their properties will need a certain level of detail in managing their data. What’s more, if the landlord in question has additional sole trader or PAYE income, they’ll need the ability to track and manage these obligations too.

While there are extremely useful software solutions on the market today for professional landlords, unincorporated landlords have largely been left behind by the accounting software industry due its focus on SMEs and limited company needs (much as happened with sole traders).

So what should you look for in a MTD ITSA software solution for unincorporated landlords?

What makes a good non-professional landlord accounting solution?

Currently, non-professional landlords are among the least likely individuals to be already digitised. Since they soon won’t have the choice, it’s down to accountants to make the transition as easy as possible, given that many have chosen to avoid specific software so far.

Some of the key factors to consider include:


One of the main reasons non-professional landlords may have not yet jumped on the software bandwagon is price. With rising utility prices and mortgage rates, many may be seeing the income from their rental properties shrinking. 

It’s no surprise, therefore, that unincorporated landlords tend to be highly price-sensitive and not willing to pay for a complex set of tools that don’t meet their needs, such as a cloud accounting package made for SMEs.

This can be made even harder due to the architectural limitations of some accounting tools, requiring individual licences for different ownership structures, driving costs up even more. MTD ITSA accounting tools for landlords need to be able to offer the right features, at the right price point.


For landlords managing property alongside other income, they need a tool they can quickly learn, use and maintain without taking time away from their other activities. Traditional cloud accounting tools can take weeks to onboard, and will include many features that just don’t apply for non-professional landlords. This means that accountants not only need to show clients what to use, but also what not to use. 

Opting for a complex accounting package is likely to create extra work for both the client attempting to navigate the tool, and the accountant fixing their mistakes, meaning that any efficiencies from digitisation will be lost completely.


To fit into their day-to-day lives, landlords need to be able manage their financial affairs on the go. While no client ever goes into business because they want to do their accounting work, non-professional landlords have other responsibilities to manage alongside their property. This often means that landlord admin is crammed into spare moments between other tasks. For helping clients be compliant on the go, mobile functionality is a must.


While non-professional landlords don’t want a mountain of features they don’t need, some specific functionality can make all the difference. Key options to look for include:

  • Tools to separate professional transactions from a personal account
  • Ability to manage income from multiple sources, such as sole trader revenue
  • Possibility to manage multiple properties from one licence
  • Mobile tools that can capture expenses on the go

Making landlords compliant with Coconut 

The right tools can make the difference between a successful cloud transition and a fraught, digital mess. That’s why Coconut is a first-of-its-kind software built for the needs of MTD ITSA clients: sole traders (including CIS subcontractors) and unincorporated landlords. Instead of balancing multiple point solutions, you can choose a single, powerful tool that makes it easy for accounting firms of all sizes to manage all clients who are required to comply with digital legislation. 

There are no unnecessary features, no extra costs, and no confusing interfaces. Just the features you need at a price that makes sense. Once your client is set up on the Coconut app, they’ll be able to do all of the following in just a few taps:

  • scan and save receipts in the cloud,
  • categorise allowable expenses, 
  • send and track digital invoices,
  • unmuddle different streams of property and/or self employed income,
  • track cashflow month to month, and
  • know how much tax to set aside.

And with easy access to all of your clients’ accounting information through the Accountant Platform, your practice will be able to gather, organise, prepare, and file data in a fraction of the time:

  • review and recode transactions in seconds,
  • easily access relevant records and receipts, and
  • submit quarterly obligations and EOPS for all of your MTD ITSA clients, including those with multiple streams of income.

The decision of what MTD ITSA software to use for your unincorporated landlord clients is getting more urgent. The sooner you find a solution that works and onboard your clients, the sooner you can start building faster, more convenient processes that add value for your firm and your customers. 

You can find out more about this valuable market and how you can make it work for your firm in our new guide The Landlord that Software Forgot—download it now.

To find out more about how Coconut works in practice you can also sign up for a Coconut Partner Account today for free and explore the platform at your own pace, or book a demo with one of our team to find out more about getting your non-professional landlord clients ready for MTD ITSA and a digital future.

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