The best MTD software is the one that keeps digital records the way you already work and sends your updates to HMRC without workarounds. Sole traders and landlords may only need quarterly updates, while VAT-registered firms need VAT returns too. This page lists ten options in no particular order, then shows how to choose.
Making Tax Digital changes the rhythm more than the maths. Instead of one rush to file once a year, you keep digital records and send updates to HMRC through software. For a lot of sole traders and landlords, the real question is how little software you can get away with, and whether it'll cope as your affairs grow.
Below are ten MTD-ready options in no particular order, sorted alphabetically: lightweight tools that only send quarterly updates, free bookkeeping apps, and full cloud accounting packages. Each description comes from the provider's own website, re-checked today. Check HMRC's own list of recognised software before you choose, and ask your accountant if you're unsure which parts of MTD apply to you.
MTD software side by side
Yes in the free plan column means the provider's own site describes a free plan or free use at small volumes, Trial only means a time-limited trial, and No means you'll choose a plan from the start. Free offers can have limits, as HMRC itself points out below.
| Tool | Type | Good for | Free plan |
|---|---|---|---|
| Affordable MTD | Income Tax quarterly updates | Sole traders wanting just quarterly updates | Yes |
| Clear Books | UK MTD accounting software | Sole traders and landlords on a free plan | Yes |
| FreeAgent | Cloud accounting with MTD | Freelancers and limited companies | Trial only |
| FreshBooks | Invoicing and accounting | Freelancers who invoice and track expenses | Trial only |
| KashFlow | Online accounting and VAT | Small firms wanting simple accounting | Trial only |
| Pandle | Cloud bookkeeping software | Sole traders wanting free bookkeeping | Yes |
| QuickFile | Free UK accounting software | Sole traders and small firms with low volumes | Yes |
| Sage Accounting | Cloud accounting from Sage | VAT-registered small businesses | Trial only |
| Xero | Cloud accounting with MTD | Growing firms wanting add-on apps | Trial only |
| Zoho Books | Cloud accounting with free plan | Sole traders wanting free MTD-ready books | Yes |
Making Tax Digital software, A to Z
Affordable MTD
Best for: Sole traders and landlords needing only quarterly updates and the final declaration, not full accounting; its own site says the free offer covers one tax year.
Clear Books
Best for: Landlords and sole traders who want MTD-ready bookkeeping with quarterly updates on a free forever plan, moving up if they need VAT reporting later.
FreeAgent
Best for: Freelancers, contractors and small limited companies who want accounting, tax and MTD submissions together, with a 30-day trial first.
FreshBooks
Best for: Service businesses that mainly invoice, track expenses and run reports, and want MTD-compliant VAT returns filed from the same app.
KashFlow
Best for: Small UK businesses wanting straightforward online bookkeeping, invoicing and VAT returns from a long-running UK product, with a 14-day trial.
Pandle
Best for: Sole traders and small businesses who want free bookkeeping with live chat from real bookkeepers, plus MTD submissions on a higher tier.
QuickFile
Best for: Anyone running a small set of accounts who wants invoicing, expenses, VAT returns and MTD for Income Tax in one cloud dashboard, free at small volumes.
Sage Accounting
Best for: VAT-registered businesses that want assisted VAT submissions and mistake detection inside familiar accounting software, with a 30-day trial.
Xero
Best for: Growing UK businesses that want bank feeds, accountant access and a wide range of add-on apps alongside MTD-ready VAT and Income Tax reporting.
Zoho Books
Best for: Built for sole traders and landlords who want to send quarterly updates and file Self Assessment from a free plan, with fuller tiers to grow into.
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What HMRC says about free MTD software
GOV.UK's guidance on choosing software for Making Tax Digital for Income Tax makes two points worth reading twice. HMRC says free products are available for people with simple tax affairs, but there may be limits on how they can be used, such as a limited number of transactions. It also says you can only use one software product for each separate submission you need to make to HMRC.
In practice, that means checking a free plan's limits against your real records before you rely on it, not after your first quarter. If you've got a busy rental property and a side business, count the transactions for each. And don't plan to keep half your records in one app and half in another for the same submission: pick one product per submission and keep those records together. If you're not sure how your income sources split into submissions, that's a quick question for your accountant.
Getting ready for MTD in six steps
- Check on GOV.UK whether and when MTD for Income Tax applies to you, and whether you're VAT-registered.
- List each income source you'll report on, such as self-employment and property.
- Count roughly how many transactions each source has in a typical quarter.
- Pick software that covers every submission you need, using HMRC's list of recognised products.
- Move your records in and connect bank feeds where the software offers them.
- Prepare your first quarterly update early, rather than on the deadline.
Bridging tool, bookkeeping app or full accounting?
- Quarterly updates only: a lightweight tool keeps things simple if you already keep good records and just need to send them.
- Free bookkeeping apps: handy for sole traders and landlords with straightforward records and modest volumes.
- Full cloud accounting: worth it if you invoice clients, run payroll, handle VAT or work closely with an accountant.
- VAT-registered firms: make sure the software files VAT returns as well as Income Tax updates.
Habits that make quarterly updates painless
- Record income and expenses weekly, not the night before an update is due.
- Photograph receipts straight away and attach them to the transaction.
- Keep business and personal spending in separate bank accounts.
- Give your accountant access to the software so questions get answered as they come up.
If you're thinking about going self-employed, here are the things to weigh before you make the jump, and if record-keeping isn't your strength, here's what a bookkeeping service can take off your plate.
Do you make Making Tax Digital software? Tool makers can ask to be considered for a featured place on this list.
My plain advice on choosing MTD software
Pick the smallest tool that covers every submission you need to make, then check its limits against your real transaction count. If you're a sole trader or landlord with simple records, a free or lightweight option can do the job well. If you're VAT-registered, invoice clients or have an accountant who already works in a particular package, go with full cloud accounting and save yourself a move later.
Read free offers closely: some cover limited volumes and some only cover a set period. And don't wait for your first deadline to find out how the software behaves. Get your records in early, check HMRC's list of recognised products, and send your first update with time to spare.
Frequently asked questions
What is MTD software?
It's software that keeps digital records and sends updates to HMRC under Making Tax Digital, for VAT, Income Tax or both.
Is there free MTD software?
Yes. GOV.UK says free products exist for simple tax affairs, but they may have limits, such as a set number of transactions. Check each provider's limits.
Can I use more than one MTD app?
HMRC says you can only use one software product for each separate submission. Different submissions can sit in different products, but keep each submission in one place.
Do landlords need MTD software?
Landlords may need it for MTD for Income Tax, depending on their circumstances. GOV.UK explains who's affected, and your accountant can confirm.
Can I keep using spreadsheets?
Some bridging tools let you send updates from records kept elsewhere. Check the tool is on HMRC's list of recognised software.
Does MTD software file my Self Assessment?
Some options let you send the final declaration from the same software. Check this before choosing if you want one tool for the whole year.
