Property managers and letting agents in the UK must handle client money under strict ARLA Propertymark and RICS client money protection rules. Accounting software for property management must separate landlord and tenant client funds from office income, produce landlord statements, and manage service charge accounts. Generic bookkeeping tools cannot do this reliably. This guide explains the requirements and maps the leading platforms.
Last reviewed May 2026
Property management firms operate at the intersection of two demanding financial frameworks: the general requirements of HMRC for business tax and VAT, and the specific client money obligations imposed on letting agents and managing agents by professional bodies and, increasingly, statute. The requirement to hold landlord rental income and tenant deposits separately from office funds is not optional - letting agents who fail to operate a proper client account face expulsion from ARLA Propertymark or RICS membership schemes and, since the Tenant Fees Act 2019, potential Trading Standards action. Accounting software that cannot support these obligations is not appropriate for professional property management, regardless of its general bookkeeping capability.
Client Money Protection: ARLA Propertymark and RICS Requirements
Since April 2019, all letting agents in England must belong to a government-approved client money protection scheme. ARLA Propertymark's Client Money Protection scheme requires members to hold client money in a designated client account, obtain annual client money audits, and produce a client money handling policy. The audit tests whether the accounting records can demonstrate that client funds are segregated and reconciled.
For managing agents handling service charge accounts in leasehold developments, RICS professional standards require service charge money to be held in a designated trust account and service charge accounts to be prepared in accordance with RICS guidance. This is materially different from a standard business bank account arrangement and requires accounting software capable of tracking income and expenditure at the level of individual development or service charge fund.
Managing agents who handle both residential lettings and leasehold service charge accounts may face dual obligations - ARLA or RICS membership for the lettings side, and RICS or ICAEW guidance for the service charge side. Software that cannot handle multiple client account structures within a single firm is a common source of compliance difficulty for mixed-portfolio agents.
Core Features for Property Management Accounting
The minimum feature set for a letting agent's accounting system includes: a client account ledger that is entirely separate from the office ledger, with no possibility of cross-posting; the ability to record rental income received, deduct management fees and maintenance charges, and produce a landlord statement showing the net remittance; automated remittance processing on a chosen date cycle (weekly or monthly); and tenant deposit tracking, distinguishing Tenancy Deposit Scheme (TDS) or Deposit Protection Service (DPS) registered deposits from those held in the agent's own custodial scheme.
Property management-specific platforms also handle maintenance work order management linked to invoice coding against individual properties, rent arrears tracking with automated reminder workflows, and Section 21 and Section 8 notice management for England (noting that Section 21 has been legislated out of use in England under the Renters' Rights Act 2025, though agents will need to manage existing tenancies through the transition). VAT on management fees, where the agent is VAT-registered, must be correctly coded so that the gross rental receipt, the VAT on management fees, and the net landlord remittance are all correctly represented in both the client ledger and the office accounts.
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Platforms Used by UK Letting and Managing Agents
The UK property management software market is dominated by a handful of integrated platforms that bundle CRM, tenancy management, and accounting in a single system. Standalone accounting tools are rarely used by professional agents because the client money requirement demands tight integration between the tenancy record and the financial record.
Reapit (formerly CFP Software) holds a large share of the UK letting agent market, particularly among multi-branch and franchise operations. Its client accounting module handles landlord statements, deposit management, and ARLA audit output. Jupix, now owned by Zoopla's parent company, targets independent agents and has a cloud-based architecture with integrated client accounting.
SME-focused platforms include Arthur Online, which integrates portfolio management with a Xero-connected accounting layer, and Landlord Vision, which targets private landlords managing their own portfolios rather than professional agents. For larger managing agents with mixed residential and commercial portfolios, Yardi and MRI Software (formerly Qube PM) provide enterprise-grade platforms with multi-fund service charge accounting and investor reporting.
| Platform | Client Account | ARLA Audit Ready | Best For |
|---|---|---|---|
| Reapit | Full | Yes | Multi-branch letting agents |
| Jupix | Full | Yes | Independent letting agents |
| Arthur Online | Via Xero integration | Partial | Smaller agents and portfolio landlords |
| Yardi | Full multi-fund | Yes | Large residential and commercial portfolios |
| MRI / Qube PM | Full multi-fund | Yes | Leasehold managing agents, PRS operators |
Service Charge Accounting for Leasehold Developments
Service charge accounting is a specialist discipline within property management. Under the Landlord and Tenant Act 1985 (as amended by the Leasehold Reform, Housing and Urban Development Act 1993 and more recently the Leasehold and Freehold Reform Act 2024), leaseholders have statutory rights to request a summary of service charge costs and to inspect the underlying receipts and invoices. Managing agents must be able to produce an accurate service charge account for each development, showing the budget, actual income collected, expenditure by category, and the balance of the service charge fund.
RICS guidance recommends that service charge accounts are prepared on an accruals basis and independently certified. The software must be able to produce fund-level reports that show income, expenditure, and closing balances at the development level, across potentially dozens of separate developments within a single managing agent's portfolio. General bookkeeping platforms cannot do this without complex multi-entity setups that introduce reconciliation risk. Yardi, MRI, and Qube PM handle this natively; smaller agents managing a handful of leasehold blocks often use dedicated service charge tools alongside their main lettings platform.
Making Tax Digital for Property Businesses
Landlords with rental income above the MTD ITSA threshold will be required to submit quarterly digital updates to HMRC from April 2026. This applies to individual landlords, not limited companies (which have their own Corporation Tax MTD timeline). The software used to manage rental income records must be MTD-compatible and capable of generating the quarterly update submissions. HMRC's MTD for Income Tax guidance specifies the data fields required in each quarterly update.
For professional agents managing portfolios on behalf of landlord clients, the MTD obligation rests with the individual landlord, not the agent. However, agents whose software produces accurate landlord statements in a format that feeds the landlord's own MTD submission will have a service advantage over those requiring landlords to manually rekey figures.
FAQ
Do all letting agents in England need client money protection?
Yes. Since April 2019, all letting agents in England that handle client money must be members of a government-approved Client Money Protection scheme. The requirement applies regardless of whether the agent is a member of ARLA Propertymark or RICS. Scotland, Wales, and Northern Ireland have separate but broadly similar requirements.
Can a landlord use a spreadsheet to manage rental accounts?
A private landlord managing their own properties can use a spreadsheet for their own records, but it must be MTD-compatible from April 2026 if their qualifying income exceeds the threshold. Professional letting agents must use a proper client accounting system to meet their Client Money Protection scheme obligations and produce the required audit evidence.
What is a landlord statement and what must it show?
A landlord statement is the periodic account produced by a letting agent showing rental income received, management fees and VAT deducted, maintenance invoices charged, and the net amount remitted to the landlord. It must be produced at the agent's agreed remittance frequency - typically monthly - and retained as part of the client account records.
How does service charge accounting differ from standard property accounting?
Service charge accounting tracks income and expenditure for a specific leasehold development, with the funds held on trust for the leaseholders. The accounts must be produced at development level, showing the opening balance, contributions collected, expenditure, and closing balance. This is separate from the managing agent's own business accounts and must be independently certified under RICS guidance.
Is VAT charged on letting agent management fees?
VAT-registered letting agents charge VAT at 20% on their management fees and other services. The rental income collected on behalf of the landlord is not the agent's own income and is not subject to VAT in the agent's hands. The VAT coding within the accounting system must reflect this distinction to produce an accurate VAT return.
How We Verified
This article draws on ARLA Propertymark's Client Money Protection requirements, RICS professional standards for service charge accounting, HMRC's MTD for Income Tax guidance, and the Landlord and Tenant Act 1985 as amended. Vendor capability claims reflect publicly available product information as of May 2026. No vendor has paid for inclusion or editorial placement. Platform tier classifications reflect observed market positioning in the UK residential and commercial property management sector.
