MTD-Compatible Software Compared

Every sole trader and landlord affected by Making Tax Digital must use HMRC-recognised software. Spreadsheets are no longer compliant. We've compared the six leading options — here's what actually matters.

At a Glance: Price & Feature Comparison

Prices exclude VAT. Introductory discounts may apply.

QuickBooks' Sole Trader plan at £10/month is the cheapest standalone subscription for full MTD ITSA compliance. Unlike Xero, it includes Self-Assessment filing. The mobile app is strong: GPS mileage tracking, receipt scanning, and expense categorisation all work well for people on the move.

Pros

• Cheapest paid MTD option at £10/month
• Self-Assessment filing included (Xero doesn't include this)
• GPS mileage tracking on mobile app
• CIS support built in for construction
• 90% off for first 6 months often available

Cons

• Limited to 1 user on entry plan
• Fewer integrations than Xero
• Payroll is an add-on at £8/mo + £2/employee

Best for

Budget-conscious sole traders, landlords, CIS subcontractors, and anyone needing Self-Assessment filing built in.

Xero is the UK's most used cloud accounting software — 45% of accounting PPC spend share. Most UK accountants prefer it. Unlimited users on every plan means sharing with your accountant costs nothing extra. AI-powered bank reconciliation launched February 2026.

Pros

• Unlimited users on every plan
• 1,000+ third-party app integrations
• Most UK accountants prefer it — lower accountancy fees
• AI receipt capture (launched Feb 2026)
• Payroll for 1 employee included on Ignite

Cons

• Ignite plan limited to 20 invoices/month
• Self-Assessment filing not included
• Multi-currency requires £50/month plan
• Prices have risen every year for 3 years

Best for

Businesses that work with a UK accountant. If yours uses Xero, follow their lead — it saves both of you time and money.

FreeAgent has the highest customer satisfaction of any UK accounting software — 4.7 on Trustpilot, 93% rated 4+. Designed for non-accountants with plain English throughout. The killer deal: free for NatWest, RBS, or Ulster Bank business account holders.

Pros

• FREE with NatWest, RBS, or Ulster Bank
• Highest customer satisfaction (4.7 Trustpilot)
• Plain English — no accounting jargon
• Self-Assessment and payroll included

Cons

• £19/mo without NatWest deal (more expensive than QuickBooks)
• Fewer integrations than Xero
• Can feel limited for complex businesses

Best for

Freelancers, sole traders, and NatWest Group customers. If you bank with NatWest/RBS/Ulster — stop here, it's free.

The UK's longest-established accounting brand. Payroll is included free on every plan — if you employ even one person, that saves £96+/year vs Xero or QuickBooks payroll add-ons. UK phone support is a genuine differentiator.

Pros

• Payroll free on all plans
• UK phone support
• Natural migration from Sage 50 desktop
• 3 months free intro offer

Cons

• Smaller app ecosystem
• Interface less polished than Xero
• Self-Assessment filing not on base plan

Best for

Sole traders with employees, CIS subcontractors paying via PAYE, Sage 50 desktop migrants.

Free MTD filing bundled with an app-based business bank account. The zero-cost compliance path if your affairs are simple and you're willing to switch banks.

Pros

• Completely free MTD filing
• Invoicing and receipt capture included

Cons

• Must use their bank account
• No payroll, no Self-Assessment
• Limited features and reporting

Annual billing instead of monthly — cheaper over 12 months for straightforward tax affairs. Built-in tax tips help you claim expenses you might miss. Popular with landlords.

Pros

• Annual pricing (cheaper than monthly)
• Self-Assessment filing included
• Tax tips built in

Cons

• Not a full accounting system
• No payroll
• Basic bank feeds

Quick Decision Guide

Still unsure? Match your situation: