MTD Software

Get ready for Making Tax Digital with HMRC-compliant tools.

Making Tax Digital for Income Tax (MTD for IT) is a major change to the way sole traders report their income to HMRC. From April 2026, sole traders with income over £50,000 are now required to submit quarterly digital updates to HMRC, with those earning over £30,000 following from April 2027. MTD requires HMRC-recognised software - you can’t use a spreadsheet on its own without bridging software, and you can’t use tools that aren’t on HMRC’s approved list. This category covers tools that are specifically confirmed as MTD-compatible.

What to look for

• HMRC recognition - only software on HMRC’s approved software list can be used for MTD submissions. All tools in this category have been confirmed as HMRC-recognised for MTD for Income Tax.

• Full accounting vs bridging software - full accounting packages like Xero, QuickBooks, FreeAgent and Sage handle everything in one place. Bridging software (123 Sheets, VitalTax) sits on top of your existing spreadsheet and submits the quarterly totals to HMRC. If you want to keep using a spreadsheet, bridging is the lower-cost option.

• Free vs paid - several genuinely free MTD options exist. Pie Tax and VitalTax are both free. This is worth knowing - you don’t have to pay for MTD compliance.

• Quarterly updates vs final declaration - MTD involves quarterly updates throughout the year and an end-of-year final declaration. Check whether the tool handles both, especially for the final declaration (some bridging tools handle the quarterly updates only).

• When you need to act - if your sole trader income is over £50,000, you need to be MTD-ready now. If it’s between £30,000 and £50,000, you have until April 2027. Below that, MTD for IT doesn’t apply yet.

Not sure if MTD applies to you? Our MTD checker will tell you in a few quick questions.

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Xero

HMRC-recognised MTD for Income Tax software with bank feeds, quarterly updates and full accounting.

Best for: Sole traders who want MTD compliance built into a full accounting package rather than using separate bridging software, and who are already using or considering Xero for their bookkeeping

Pricing: Paid - from £7 +VAT per month

Free trial: Yes

MTD compatible: Yes

Mobile app: Yes

UK specific: No

Visit Xero

QuickBooks

HMRC-recognised MTD software with strong sole trader and self assessment features.

Best for: Sole traders wanting MTD compliance within a full accounting package

Pricing: Paid - from £10 per month

Free trial: Yes

MTD compatible: Yes

Mobile app: Yes

UK specific: No

Visit QuickBooks

Sage

HMRC-recognised MTD for Income Tax software from one of the UK's most established accounting brands. Covers quarterly updates, digital record keeping and VAT.

Best for: Sole traders who want MTD compliance within a trusted, well-known accounting package

Pricing: Free basic / Paid from £7 +VAT per month

Free trial: Yes

MTD compatible: Yes

Mobile app: Yes

UK specific: No

See our review blog here.

Visit Sage

FreeAgent

HMRC-recognised MTD software built for freelancers. Free for NatWest/Mettle customers.

Best for: Freelancers especially those banking with NatWest or Mettle

Pricing: Free with Natwest, RBS, Ulster Bank or Mettle or £19 +VAT per month

Free trial: Yes

MTD compatible: Yes

Mobile app: Yes

UK specific: Yes

Visit FreeAgent

123 Sheets

Low-cost MTD bridging software for spreadsheet users.

Best for: Budget-conscious sole traders who prefer spreadsheets over accounting software

Pricing: Paid - from £19.75 +VAT per year

Free trial: Yes

MTD compatible: Yes

Mobile app: No

UK specific: Yes

Visit 123 Sheets

Monzo Business

Built-in MTD filing tools on the paid Monzo Business tier.

Best for: Monzo business account holders on the Plus plan

Pricing: Free basic / paid £9 per month

Free trial: N/A

MTD compatible: Yes

Mobile app: Yes

UK specific: Yes

Visit Monzo Business

TaxNav

Browser-based MTD for Income Tax software. No downloads or installation required.

Best for: Sole traders who want a simple browser-based MTD filing tool with no software to install

Pricing: Paid - from £60 +VAT per year

Free trial: Yes

MTD compatible: Yes

Mobile app: No

UK specific: Yes

Visit TaxNav

Untied

App-based self assessment and MTD software, covers sole traders and landlords.

Best for: Sole traders with straightforward income who want a modern app-based filing experience

Pricing: Paid - from £64.99 per year for self assessment / £129.99 for MTD tier

Free trial: Yes

MTD compatible: Yes

Mobile app: Yes

UK specific: Yes

Visit Untied

VitalTax

Low-cost MTD bridging software for sole traders using spreadsheets. Submits quarterly updates directly to HMRC.

Best for: Sole traders who want to keep using spreadsheets but meet MTD requirements

Pricing: First submission free - from £30 +VAT after that

Free trial: N/A

MTD compatible: Yes

Mobile app: No

UK specific: Yes

Visit VitalTax

Pie Tax

App-based MTD for Income Tax software with automated bookkeeping, real-time tax calculations and direct HMRC submission.

Best for: Sole traders who want a free, mobile-first MTD solution that handles quarterly updates and self assessment in one app

Pricing: Free basic / paid tiers

Free trial: N/A

MTD compatible: Yes

Mobile app: Yes

UK specific: Yes

Visit PieTax

If you’re already using accounting software, check whether it’s MTD-recognised - Xero, QuickBooks, FreeAgent, Sage, Zoho Books and QuickFile all are. If you want to keep using spreadsheets, VitalTax (first submission free, then £30 a year plus VAT) or 123 Sheets (£19.75 plus VAT for the first year) are bridging tools that handle the HMRC submission for you. If you’d rather use an app, Pie Tax (free) or Untied (paid) are worth a look.

Last reviewed: June 2026