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Choosing the wrong MTD software costs you time, money, and frustration. The wrong choice means either paying for features you don't need or struggling with a tool that doesn't fit how you work. This guide helps you compare MTD plans side by side and cuts through the marketing to tell you honestly which software suits which type of taxpayer, and why.
Every option listed here is fully HMRC-approved for MTD for Income Tax. The question is not which one is "best" in the abstract. it is which one is bestfor you.
| Software | Starting Price | Best For | Mobile App | Free Trial | Accountant-Friendly |
|---|---|---|---|---|---|
| QuickBooks | £14/mo | Most sole traders | ✓ Excellent | ✓ 30 days | ✓ Good |
| FreeAgent | £19/mo | Invoicing businesses | ✓ Good | ✓ 30 days | ✓ Good |
| Xero | £16/mo | Accountant users | ✓ Good | ✓ 30 days | ✓ Best |
| Sage Accounting | £15/mo | CIS / VAT-registered | Average | ✓ 30 days | ✓ Good |
| Zoho Books | Free | Best free option. Phase 2/3, gig workers, simple affairs | ✓ Good | ✓ Free tier | Paid plans |
| Bridging software | £5–15/mo | Spreadsheet users | ✗ N/A | Varies | Varies |
| FreshBooks | £15/mo | Freelancers & consultants | ✓ Good | ✓ 30 days | ✓ Good |
| Coconut | £4.50/mo | Mobile-first sole traders | ✓ Excellent | ✓ Free trial | Average |
| GoSimpleTax | £46/yr | Filing-only, lightweight | ✗ N/A | ✓ Free trial | Average |
| QuickFile | Free–£15/mo | Low transaction volumes | Average | ✓ Free tier | ✓ Good |
| Starling (Toolkit) | Free with account | Bank + bookkeeping combo | ✓ Good | ✓ Free | ✗ Basic |
| Hammock | £15–20/mo | Portfolio landlords | ✓ Good | ✓ 30 days | ✓ Good |
| Clear Books | Free–£12/mo | Established UK sole traders | Average | ✓ Free tier | ✓ Good |
Prices correct July 2026. verify before purchasing. All prices exclude VAT. Monthly prices on annual plans.
These two come up together constantly because they solve different problems well. Sage is built for CIS contractors and anyone with more complex bookkeeping needs — sub-contractor deduction tracking, multi-user access, and stronger reporting as your business grows. FreeAgent is built for freelancers and small businesses that invoice clients directly — cleaner invoicing, time tracking, and a gentler learning curve for someone doing their own books without an accountant.
| Sage | FreeAgent | |
|---|---|---|
| Best for | CIS contractors, growing businesses | Freelancers, client-invoicing businesses |
| Learning curve | Moderate | Easier for beginners |
| Invoicing | Good | Excellent |
| CIS support | Dedicated module | Limited |
| Free with some UK bank accounts | No | Yes, with NatWest, RBS, Mettle |
If you're a CIS sub-contractor or main contractor, Sage's dedicated CIS module makes it the stronger pick. If you freelance or run a small service business that sends client invoices regularly, FreeAgent's invoicing and time-tracking tools tend to win out, especially since it's free with several major UK business bank accounts.
If you currently keep your records in a spreadsheet (Excel or Google Sheets) and want to continue doing so, bridging software lets you submit your quarterly MTD updates without switching to full accounting software. The bridging tool reads your spreadsheet data and submits it to HMRC's API.
When bridging software makes sense:
When bridging software does NOT make sense:
Popular bridging software options include Taxfiler, VitalTax, and 123Sheets. typically priced at £5–15/month, making them the cheapest MTD compliance route after Zoho Books free tier.
Beyond the five main players above, there's a wider field of well-known, genuinely popular UK options. some free, some niche-specific, some bundled into products you might already use. Here's the fuller picture.
A well-established name among freelancers and small service businesses, particularly popular with consultants and creatives who invoice clients directly. Strong invoicing and time-tracking features, HMRC-recognised for MTD, starting around £15/month. Less landlord-focused than QuickBooks or Xero, but a solid all-rounder if invoicing is your main workflow.
A mobile-first app built specifically for UK sole traders, combining a business current account with built-in MTD-ready bookkeeping. Popular with tradespeople and gig workers who want everything, banking and tax records, in one app. Plans start around £4.50/month, among the cheapest paid options on the market.
A long-standing, well-known UK name focused specifically on simplifying Self Assessment and MTD filing rather than full bookkeeping. Popular with sole traders who want a lightweight, filing-focused tool rather than a complete accounting suite. Starts around £46/year, billed annually.
A UK-built accounting platform with a genuinely useful free tier for businesses under a certain transaction volume, scaling up to low-cost paid plans as you grow. Well regarded among small UK businesses and bookkeepers for its clean interface and fair pricing, with paid plans typically under £15/month.
Not accounting software in the traditional sense, but worth knowing about: Starling's business current account includes a free built-in bookkeeping toolkit with basic MTD-ready record-keeping, bundled at no extra cost with the account. A genuinely free option if you're also looking for a business bank account, though less feature-rich than dedicated accounting software as your business grows.
A landlord-specific platform built around automatically categorising rental income and expenses from connected bank accounts, designed for portfolio landlords who want MTD compliance without manual data entry. A well-known name specifically within the landlord software space, typically priced around £15–20/month depending on portfolio size.
A long-established UK accounting platform with a genuinely free tier for sole traders with straightforward affairs, and paid plans for growing businesses needing VAT, payroll, or multi-currency support. A trusted, well-known name in UK small business accounting circles for over a decade.
| Taxpayer Type | Top Pick | Runner-Up | Budget Option |
|---|---|---|---|
| Freelancer / consultant | FreeAgent | QuickBooks | Zoho Books |
| Sole trader (product/trade) | QuickBooks | Sage | Zoho Books |
| Landlord only | Xero | QuickBooks | Zoho Books |
| Sole trader + landlord | QuickBooks | Xero | Zoho Books |
| CIS contractor | Sage | QuickBooks | Bridging software |
| Gig worker (Uber/Etsy, income <£35k) | Zoho Books (free) | QuickBooks | Bridging software |
| Uses an accountant | Xero | FreeAgent | Ask your accountant |
| Spreadsheet user | Bridging software | Zoho Books | VitalTax |
Yes. You are not locked into a single software provider. You can switch to a different HMRC-approved MTD software at any point, even mid-year. You will need to notify HMRC of your new software and re-authorise the connection. Your historical data may not transfer automatically. check the data export options of your current provider before switching.
No. MTD software does not submit automatically. You review and confirm each quarterly update before it is sent to HMRC. This is deliberate. you remain responsible for the accuracy of what is submitted. The software prepares the submission, flags any issues, and then waits for your explicit confirmation before sending.
No. All the major MTD software providers handle both self-employment income and rental property income within a single account. QuickBooks, Xero, FreeAgent, and Sage all allow you to categorise transactions by income source and submit separate business income statements for each source within your quarterly update.
Zoho Books has a free tier that is fully HMRC-approved for MTD ITSA. It handles up to £35,000 turnover and 1,000 invoices per year. Beyond the Zoho free tier, the cheapest paid options are bridging software providers like VitalTax at around £5/month. There is no completely free bridging software from reputable providers.
This depends on your arrangement. Under MTD, you are required to keep digital records throughout the year, not just at year-end when you hand records to your accountant. If your accountant sets up a Xero account for you and gives you access to record transactions during the year, you may be able to share a subscription. Discuss this directly with your accountant. they may include MTD software access as part of their service.
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