There is no “best” MTD software, and anyone telling you otherwise has not looked at HMRC’s list recently.
As at 21 August 2026, 141 products have passed HMRC’s recognition process for Making Tax Digital for Income Tax. Thirty-one of them offer a free version — though only 27 of those handle sole trader income at all. HMRC itself states it “does not recommend any specific product and is not responsible for availability or whether the software meets a particular current or future need”, and it now presents results in random order “to ensure fairness”.
This is a young, churning market. Here is what is actually on the list, where the free options sit, and the one filter that matters more than price.
HMRC no longer publishes a list — it publishes a tool
If you are looking for the old table of software suppliers on GOV.UK, it is gone. HMRC removed the table of software listings from its guidance on 31 July 2025, replacing it with an interactive software finder. The last remnant went on 13 July 2026, when the “Software products in development” section was removed as well — those products are now carried in the finder too. The finder is still labelled Beta.
You reach it through Find software that works with Making Tax Digital for Income Tax. It asks about your income sources, whether you want to create new digital records or connect to existing ones, and your accounting period, then returns a filtered list. You can also browse everything and apply filters yourself, or check whether software you already use is compatible.
The change matters for two reasons. First, no third-party comparison article can be authoritative — the underlying data moves. HMRC’s own update log shows suppliers being added and removed repeatedly through the first half of 2026. Second, the filters are the real product: they let you eliminate 80% of the list in three clicks.
The filter that catches people out
54 of the 141 recognised products handle quarterly updates only — not your tax return.
That is more than a third of the market, not a fringe. Pick one of them and you will need a second product to file the return itself, digitally linked to the first. The other 87 cover both submissions.
HMRC allows you to use more than one product, but with a hard constraint: you can only use one product for each separate submission. You cannot split your property quarterly updates across two packages. What you can do is use one product for records and updates and another for the return, or run different products for different businesses.
Income source coverage is the second filter to apply. Of the 141:
| Income sources supported | Products |
|---|---|
| Sole trader, UK property and foreign property | 68 |
| Sole trader and UK property | 40 |
| Sole trader only | 19 |
| UK property and foreign property | 4 |
| UK property only | 10 |
Read that as two numbers. 127 of the 141 support sole trader income, so a sole trader with no property has a wide shortlist — but not the whole list, because 14 products are property-only and rule themselves out immediately. Add a foreign rental and the field roughly halves: only 72 products cover foreign property.
Free options: what is actually available
HMRC’s guidance confirms that “free products are available for those with simple tax affairs but there may be limits on how the product can be used, for example they could have a limited number of transactions”. The finder tool adds its own caveat: some listed products have free trials rather than genuinely free versions, and you should check the provider’s own pricing page.
With that health warning, HMRC’s finder flags 31 products as having a free version as at 21 August 2026.
Four of those 31 are no use to a sole trader. GetGround, PaTMa Property Manager, SimplifyMTD and SmartPropertyManager.com are property-only — they do not support sole trader income at all, and all four are quarterly-updates-only into the bargain. If you have read elsewhere that every free product works for sole traders, that is where the claim breaks.
The tables below are the 27 free products that do support sole trader income.
Free, and covers both quarterly updates and the tax return
| Product | Type | Income sources |
|---|---|---|
| Abridge (MTD for Excel/Sheets) | Bridging | Sole trader, UK property, foreign property |
| Affordable MTD | Both | Sole trader, UK property |
| CIS Invoice | Creates digital records | Sole trader |
| Clear Books Free | Creates digital records | Sole trader, UK property, foreign property |
| Coconut Free | Both | Sole trader, UK property |
| DIY Tax | Both | Sole trader, UK property, foreign property |
| flonancial | Bridging | Sole trader, UK property |
| FreeAgent | Creates digital records | Sole trader, UK property |
| Monzo | Creates digital records | Sole trader, UK property |
| MTD Landlord Services | Creates digital records | Sole trader, UK property |
| My Tax Digital (Free) | Both | Sole trader, UK property, foreign property |
| Pandle | Both | Sole trader, UK property |
| RentalBux Free | Both | Sole trader, UK property, foreign property |
| Sage Sole Trader & Landlord Free | Creates digital records | Sole trader, UK property |
| Self Assessment Direct | Both | Sole trader, UK property, foreign property |
| TaxBridge UK MTD by Amelia GB | Both | Sole trader, UK property, foreign property |
| TaxHeaven | Both | Sole trader, UK property, foreign property |
| TaxUpdates | Bridging | Sole trader, UK property, foreign property |
| Zoho | Creates digital records | Sole trader, UK property |
Free, but quarterly updates only
You will need a second product to file the return.
| Product | Type | Income sources |
|---|---|---|
| Acxite | Both | Sole trader, UK property, foreign property |
| Adminsoft Accounts | Creates digital records | Sole trader, UK property, foreign property |
| Aligned.tax MTD for Spreadsheets | Bridging | Sole trader, UK property, foreign property |
| Lloyds Bank | Creates digital records | Sole trader, UK property |
| Starling | Creates digital records | Sole trader, UK property |
| SumUp Accounting | Creates digital records | Sole trader |
| Tax Mouse | Both | Sole trader, UK property |
| Tide Accounting | Creates digital records | Sole trader |
“Both” means the product can create digital records and connect to records you already keep elsewhere.
Worth noticing in that second table: Lloyds, Starling, Tide and Monzo all appear, which means a free MTD tool may already be attached to the business account you hold. Three of those four are quarterly-updates-only, so check the submission column before assuming the bank has solved the whole problem.
Paid options and what they cost
The recognised list includes the familiar names. Xero, QuickBooks (Intuit), Sage, IRIS, TaxCalc, Clear Books and Coconut all appear, alongside dozens of specialists you will not have heard of.
Published pricing, verified from provider pricing pages on 20 August 2026:
- Xero — £7 a month ex VAT on the Simple plan, or £18 on Ignite, both from 1 September 2026 when Xero’s UK prices rose. Ignite was £16 before that date. If you are not VAT registered, Simple is your plan and £7 is your number — the “Xero from £16” figure that appears in most comparison articles was the VAT-registered entry tier and is now out of date as well.
- FreeAgent — £19 a month ex VAT on the sole trader plan, and free for NatWest, RBS, Ulster Bank and Mettle business account holders. That bank tie-up is why FreeAgent appears in the free column above, and it is the single most overlooked cost saving for sole traders who bank with those four. Beware the widely-quoted £33 figure: that is FreeAgent’s limited company tier, not the sole trader one. FreeAgent prices by structure — £10 landlord, £19 sole trader, £27 partnership or LLP, £33 limited company.
- QuickBooks — listed as a paid product; pricing tiers change frequently, so check the current rate directly rather than trusting a figure in an article.
Do not read price as a proxy for suitability. An £18-a-month package that does not support foreign property is worthless to a landlord with a flat in Spain, and a free bridging tool is entirely adequate for someone who already keeps clean spreadsheets.
Bridging software versus full record keeping
Two architectures, and the choice is genuinely about how you already work.
Software that creates digital records links to your business bank account, scans receipts or takes manual entry, and holds everything in one place. Sixty-two of the 141 products do only this. Most will handle quarterly updates and the return as well.
Software that connects to your records — bridging software — sits on top of spreadsheets or other accounting tools and makes the submissions. Twenty-eight products do only this. Fifty-one do both.
If you have kept a working spreadsheet for a decade, bridging preserves it. The catch is the digital link requirement: once a record has been sent to HMRC in a quarterly update, you must not manually move it. Linked cells, formulas, CSV import and export, API transfers and emailed spreadsheets are all acceptable; copy-paste and manual re-keying are not.
What else to check before you commit
- Your accounting period. Standard tax year, calendar update periods (1 April to 31 March) or neither. Not every product supports all three, and calendar periods must be selected before your first quarterly update.
- VAT. If you are VAT registered you already use MTD software. Check whether it also covers Income Tax, or whether your new choice can handle VAT.
- Multiple agents. If you use an accountant and a bookkeeper, confirm the product supports a main and a supporting agent.
- HMRC Assist. A built-in feature in some products that flags likely errors using your submissions and the data HMRC holds.
- Accessibility and Welsh language. Both are filters in HMRC’s tool.
- Your agent’s view. Ask before you buy. If they cannot support your choice, you will end up switching.
Frequently asked questions
Is there genuinely free MTD software for sole traders?
Yes. As at 21 August 2026, 31 of the 141 HMRC-recognised products offer a free version, and 27 of those support sole trader income — the other four are property-only. HMRC warns that free products suit simple tax affairs and may cap usage — for example by limiting the number of transactions.
Can I keep using spreadsheets under MTD?
Yes, with bridging software that connects to them and makes the submissions. Once a record has been sent to HMRC you must not manually move it — no copying, cutting or retyping. Linked cells, formulas, CSV transfers and APIs are acceptable digital links.
Does all MTD software file my tax return as well as quarterly updates?
No. 54 of the 141 recognised products handle quarterly updates only — more than a third. If you choose one of those, you will need a second, digitally linked product to submit the return.
Can I use two different software products?
Yes, but only one product per separate submission. You can use one product for record keeping and updates and another for the return, or different products for different businesses — you cannot split a single submission across two.
Does HMRC recommend a particular MTD product?
No. HMRC states it does not recommend any specific product and is not responsible for availability or whether the software meets a particular need. All listed products have passed its recognition process, and results are shown in random order.
Or skip the software decision entirely
Choosing software is a real cost even when the licence is free: hours of evaluation, a migration, and the risk of picking something that cannot file your return. For a lot of sole traders the maths favours handing the whole thing over.
SmartFiling handles MTD for Income Tax and Self Assessment on a fixed fee, using compatible software on your behalf — digital records, quarterly updates and your year-end return. We work with Xero, QuickBooks and FreeAgent, every submission is reviewed by an ICAEW Chartered Accountant, and turnaround is three weeks.
