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⚡ 30-Second Software Finder
Which MTD software actually suits you?
What best describes your situation?
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 cuts through the marketing and tells 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 best for you.
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The only rule that matters: Your chosen software must be on HMRC's approved list and must support MTD for Income Tax specifically — not just MTD for VAT. Many bookkeeping tools support VAT but not ITSA. Always verify before subscribing.
Quick Comparison Table
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
Prices correct June 2026 — verify before purchasing. All prices exclude VAT. Monthly prices on annual plans.
QuickBooks — Best for Most Sole Traders
QuickBooks
The most complete MTD solution for self-employed people who want to handle their own bookkeeping.
From £14/month
Strengths
Best mobile app of any MTD software — camera receipt capture, mileage auto-tracking via GPS
Strongest MTD ITSA integration — quarterly submissions built into the main dashboard
Automatic bank feed connects to virtually every UK bank
Self-Assessment calculation built in — tax estimate always visible
Excellent support — 24/7 chat and phone
Handles both self-employment and rental income in one account
Weaknesses
More expensive than Zoho Books at scale
Can feel overwhelming for very simple businesses
Some advanced inventory features not relevant to service businesses
Best for: Sole traders who manage their own bookkeeping, gig workers (Uber, Deliveroo, Etsy), freelancers who invoice clients, anyone who wants a complete mobile-first solution.
Free if you have a NatWest, Royal Bank of Scotland, or Ulster Bank business account
Excellent project time-tracking for consultants and agencies
Strong HMRC integration — MTD submissions in a few clicks
Weaknesses
Slightly less powerful mobile app than QuickBooks
Limited inventory management
More expensive than QuickBooks at the equivalent feature level
Not free for Lloyds/Barclays/HSBC business account holders
Best for: Consultants, designers, writers, architects — anyone who sends invoices to clients. Also ideal for NatWest/RBS business account holders (free access). Very good for first-time bookkeepers.
The accountant's favourite — strongest multi-user access and the largest ecosystem of add-ons.
From £16/month
Strengths
Overwhelmingly the most popular software among UK accountants — your accountant almost certainly knows it
Best multi-user access — you and your accountant work in the same system simultaneously
Largest ecosystem of add-ons and integrations (800+ apps)
Excellent reporting and financial dashboards
Strong for landlords with multiple properties
Bank reconciliation is fast and intuitive
Weaknesses
Steeper learning curve for beginners managing alone
Less intuitive mobile app compared to QuickBooks
Can be overkill for very simple sole traders
Support response times can be slower than QuickBooks
Best for: Anyone who uses an accountant and wants to work in the same system. Landlords with multiple properties. Businesses that need strong reporting. Growing sole traders who plan to hire staff.
The strongest option for CIS contractors, VAT-registered businesses, and those transitioning from desktop accounting.
From £15/month
Strengths
Best CIS module of any MTD software — handles sub-contractor deductions correctly
Strong for VAT-registered businesses already using Sage for VAT MTD
Excellent payroll integration if you have employees
Long-established UK provider — trusted by accountants for decades
Good construction industry workflow features
Weaknesses
Mobile app weaker than QuickBooks and FreeAgent
Interface feels older than competitors
Less intuitive for non-accountants managing alone
Overkill and overpowered for simple sole traders
Best for: CIS contractors and sub-contractors, VAT-registered sole traders, businesses with employees, anyone already using Sage for VAT MTD who wants to add Income Tax MTD.
Zoho Books — Best Free Option (and Genuinely Excellent)
🏆 Top Free Pick — HMRC Approved
Zoho Books
The only fully HMRC-approved MTD software with a genuinely free tier — and it is better than most people expect.
Free tier available
Strengths
Completely free for qualifying income up to £35,000 — covers the majority of Phase 2 and Phase 3 taxpayers at zero cost
Fully HMRC-approved for MTD ITSA — not a workaround, not bridging software, full native MTD compliance
Clean, modern interface that is genuinely easier to learn than QuickBooks or Xero for first-time users
Automatic bank feed included even on the free tier — connects to most major UK banks
Good mobile app — receipt capture, expense logging, income recording all mobile-ready
MTD quarterly submission built directly into the dashboard — no add-ons needed
Handles both self-employment and rental income in a single account
Worth knowing
Free tier is one user only — if you need your accountant to access your account simultaneously, you will need a paid plan
Fewer UK bank integrations than QuickBooks for niche business accounts (most personal and major business banks are covered)
Less brand recognition in the UK market than Xero or QuickBooks — though the product itself is mature and robust
Best for: Most sole traders and landlords with qualifying income between £20,000 and £35,000. Phase 3 taxpayers (joining April 2028) who want to get ahead. Anyone managing their own accounts without an accountant who wants a clean, modern tool at zero cost. If your income is under £35,000 and you do not need accountant access — Zoho Books free tier is the most straightforward choice available.
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:
You already have a well-organised spreadsheet system and don't want to change it
Your bookkeeping is genuinely simple (few transactions per quarter)
You want the cheapest possible MTD compliance route
Your accountant currently uses your spreadsheet to prepare your Self Assessment
When bridging software does NOT make sense:
You have high transaction volumes — manual spreadsheet entry becomes a bottleneck
You want bank feeds or receipt scanning to automate data entry
You want a tax estimate and real-time financial overview
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.
Which Software By Taxpayer Type
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
Frequently Asked Questions
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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