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Guide

Choosing Making Tax Digital software

If MTD for Income Tax applies to you, you need software that keeps digital records and files quarterly updates with HMRC. Here is how to choose without overpaying - and without leaving it until the week a deadline lands.

What HMRC actually requires

  • Digital records of your business and property income and expenses
  • Quarterly updates filed through MTD-compatible software by 7 August, 7 November, 7 February and 7 May
  • Your tax return submitted through the software by 31 January

HMRC publishes an official list of recognised software - always confirm a product is on it before subscribing: gov.uk compatible software list.

The main options

FreeAgent

Best for: Sole traders who want full bookkeeping, and it is free with some UK bank accounts

Complete accounting package with MTD quarterly filing built in. Free to customers of certain UK banks (check your business account perks before paying for anything).

Xero

Best for: Growing businesses that may take on employees or VAT

Widely used by accountants, strong bank feeds and app ecosystem. More capability than a simple sole trader needs, priced accordingly.

QuickBooks

Best for: Sole traders who want a polished mobile-first experience

Self-employed and simple-start tiers cover MTD filing with receipt capture and mileage tracking. Frequent introductory discounts.

Sage

Best for: Those already in the Sage ecosystem or working with a Sage-based accountant

Long-established UK accounting vendor with MTD-ready individual and business tiers.

Landlord-specific apps (e.g. Hammock, Landlord Studio)

Best for: Landlords whose only MTD income is property

Purpose-built for rental income: per-property records, tenancy tracking and MTD quarterly updates without full business accounting.

Bridging software

Best for: Spreadsheet users who refuse to give up their spreadsheet

Connects an existing spreadsheet to HMRC's API to file quarterly updates. Meets the letter of the rules, but digital record-keeping requirements still apply to the underlying records.

We have deliberately not listed prices - vendors change them and run frequent offers. Check current pricing and whether your bank, accountant or professional body gets you a free or discounted subscription. We have no commercial relationship with any vendor listed here.

How to decide quickly

  1. Only property income? Choose a landlord-specific app - full accounting software is overkill.
  2. Bank with a provider that bundles FreeAgent? Use it - free beats cheap.
  3. Use an accountant? Ask what they support first; fighting your accountant's workflow costs more than any subscription.
  4. Love your spreadsheet? Bridging software works, but be honest about whether your records meet the digital record-keeping rules.

Not sure you are mandated?

Check in 30 seconds with our MTD checker - it tells you if the April 2026, 2027 or 2028 wave applies to your income.

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