Sage

Sage Sole Trader is free, HMRC-recognised software built specifically for non-VAT-registered sole traders doing MTD for Income Tax and Self Assessment. If you need fuller bookkeeping or you’re VAT-registered, Sage’s Accounting plans start from £20 a month.

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At a glance

Sage actually has two relevant products here. Sage Sole Trader is free, HMRC-recognised, MTD-ready software built specifically for non-VAT-registered sole traders doing Self Assessment - which covers most people reading this. Sage’s separate Accounting plans (Start, Standard and Plus) are aimed at VAT-registered sole traders and growing small businesses, and also cover MTD for IT.

Free

£20/m

Accounting Start plan

Sage Sole Trader

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Is Sage HMRC-recognised for MTD?

Yes, both product lines are. Sage Sole Trader (formerly called Sage Individual) is Sage’s dedicated free tool for non-VAT-registered sole traders and freelancers, built around Self Assessment and MTD for Income Tax rather than full business accounting. Sage Business Cloud Accounting (Start, Standard and Plus) is the fuller accounting platform, aimed at VAT-registered sole traders and small businesses, and is also listed on HMRC’s official register of recognised MTD software.

Which Sage product is right for MTD for IT?

If you’re not VAT-registered and just need to keep digital records and file MTD for Income Tax, Sage Sole Trader is the one built for you, and it’s genuinely free. If you’re VAT-registered, need to manage suppliers and CIS, or want fuller bookkeeping features like cash flow forecasting and custom reports, Sage’s Accounting plans (Start, Standard or Plus) are the better fit.

Sage Sole Trader Free: no cost, single bank account, MTD-ready, Income Tax Self Assessment summary (SA103S), 5 invoices a month
Sage Sole Trader paid tier: £7/month (excl. VAT), adds unlimited auto-categorised transactions, CIS, multiple bank accounts and unlimited invoicing
Sage Accounting Start: for VAT-registered sole traders just starting out, includes payroll and Sage Copilot
Sage Accounting Standard and Plus: for small businesses managing suppliers, CIS, inventory or multiple currencies

How does Sage handle MTD for Income Tax?

Digital record keeping: connect a bank account, or enter income and expenses manually, so records are kept digitally as HMRC requires
Quarterly updates: Sage compiles your digital records into the format HMRC requires and submits each quarterly update directly from within the software
Final declaration: at year end, Sage brings together the four quarterly updates and any other income or reliefs so you can complete and submit your final declaration by 31 January
Dashboard visibility: Sage shows upcoming MTD deadlines and submission status so you can track where you stand through the year

Key MTD-specific features

Sage Sole Trader is genuinely free for non-VAT-registered sole traders, with MTD for IT and Self Assessment built in from the free tier up
Direct HMRC submission for quarterly updates and the final declaration across both Sage Sole Trader and Sage Accounting
24/7 in-product support via Sage Copilot, included on every plan
Receipt and invoice capture via the Sage mobile app (manual entry on Sage Sole Trader Free, snap-and-scan on the paid tiers)
Sage Accounting adds bank feed automation, CIS management and more detailed reporting for VAT-registered or growing businesses

Which Sage plan do you need for MTD for IT?

Most non-VAT-registered sole traders only need Sage Sole Trader. If you’re VAT-registered or want fuller bookkeeping, Sage Accounting is the better fit.

Sage Sole Trader - Free

Non-VAT-registered sole traders, MTD-ready from day one:

Making Tax Digital ready, plus an Income Tax Self Assessment summary (SA103S)
Record and manage income and expenses, including landlord income
Connect 1 bank account, plus 25 auto-categorised transactions
Enter and record receipts manually
Create and send 5 sales invoices a month
Free mobile app, plus 24/7 in-product support

Sage Sole Trader paid tier - £7/month (excl. VAT)

Everything in Free, plus:

Unlimited auto-categorised transactions
Calculate and manage CIS
Snap and scan receipt records, instead of manual entry
Connect multiple bank accounts, plus 10GB document storage
Create and send unlimited sales invoices
Human webchat, content and community support
Currently 90% off for 6 months

Sage Accounting Start - £20/month (excl. VAT)

For VAT-registered sole traders just starting out:

Making Tax Digital ready, plus calculate and submit VAT to HMRC
Create and send unlimited sales invoices, and track what you’re owed
Reconcile transactions automatically
Payroll and Sage Copilot (AI productivity assistant) included as standard
Carbon footprint tracking
Currently discounted to £2/month for 6 months

Sage Accounting Standard - £43/month (excl. VAT)

Everything in Start, plus:

Manage and submit CIS
Send quotes and estimates, and forecast cashflow
Run custom reports
Snap and scan receipts and invoices (30 included a month)
Currently discounted to £4.30/month for 6 months

Sage Accounting Plus - £59/month (excl. VAT)

Everything in Standard, plus:

Create, track and manage budgets
Multi-currency banking, with exchange rate management
Stock and inventory management
Snap and scan receipts and invoices (100 included a month)
Currently discounted to £5.90/month for 6 months

Always check Sage’s current UK pricing page, as rates and offers change periodically.

Pros and cons

Pros:

Sage Sole Trader is free for non-VAT-registered sole traders, with MTD for IT and Self Assessment built in
HMRC-recognised across both product lines
Established UK provider with a long track record supporting small businesses and sole traders
24/7 in-product AI support via Sage Copilot on every plan, including the free one
Scales up to Sage Accounting if your business grows, becomes VAT-registered, or needs fuller bookkeeping features

Cons:

Sage Sole Trader Free is capped at one bank account, 25 auto-categorised transactions and 5 invoices a month - the paid £7 tier removes these caps
If you need VAT handling, CIS, or multi-currency support, you’ll need to move up to an Accounting plan, which costs more than the Sole Trader tier
Interface can feel less modern than some newer cloud accounting tools
Promotional pricing on the Accounting plans is time-limited, so budget for the standard rate once it ends

Who is Sage best for MTD for Income Tax?

If you’re a non-VAT-registered sole trader and MTD for Income Tax and Self Assessment are all you need, Sage Sole Trader is hard to beat: it’s free, HMRC-recognised, and built specifically for this. If you’re VAT-registered, need to manage suppliers or CIS, or want a fuller bookkeeping platform as your business grows, Sage’s Accounting plans cover MTD for IT too and add the wider feature set, starting at £20 a month. For a broader look at Sage as an everyday accounting tool, see our full Sage review elsewhere on this site.

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Frequently asked questions

Is Sage free for Making Tax Digital for Income Tax?

Yes, if you’re a non-VAT-registered sole trader. Sage Sole Trader’s free tier is HMRC-recognised and MTD-ready at no cost. VAT-registered sole traders need a paid Sage Accounting plan, from £20 a month.

What’s the difference between Sage Sole Trader and Sage Accounting?

Sage Sole Trader is built specifically for non-VAT-registered sole traders doing Self Assessment and MTD for Income Tax. Sage Accounting (Start, Standard, Plus) is the fuller bookkeeping platform, aimed at VAT-registered sole traders and growing small businesses.

Does Sage submit quarterly updates and the final declaration directly to HMRC?

Yes. Both Sage Sole Trader and Sage Accounting are HMRC-recognised and let you submit quarterly updates and your final declaration from within the software.

When do I need to be MTD-compliant using software like Sage?

Sole traders with qualifying income above £50,000 needed to comply from April 2026. Those with income between £30,000 and £50,000 must join from April 2027.

Can I upgrade from Sage Sole Trader to Sage Accounting later if my business grows or becomes VAT-registered?

Yes. Sage’s products are designed to let you move up as your needs change, from the free Sole Trader tier through to the full Accounting plans.

Compare MTD software for sole traders

Sage is one option among several worth comparing. Browse the full MTD Software directory to compare it against Xero, QuickBooks, FreeAgent and other HMRC-recognised options.

Pricing and offers correct at time of publication. Always check the Sage website for current pricing and promotional terms before signing up.