If you’re one of the 605,000 sole traders who will need to be MTD-compliant in 2026, then here’s a rundown of the best Making Tax Digital (MTD) software around.
MTD-integrated business bank accounts
Tide
Tide has its own free integrated MTD software as part of its business bank account. Ready to use now, the software automatically tracks and stores all business income and expenses. It provides real-time estimates of what you’re likely to owe, giving you greater visibility of your tax position over the year. Tide also has a linked Tax Account where you can put money aside for payments.
We particularly like that the account connects seamlessly to HMRC so that you can submit your returns directly from your Tide app.
Monzo
You can currently join the waitlist for Monzo’s Making Tax Digital software. When launched, you’ll be able to file directly to HMRC, categorise transactions, attach receipts and save for tax during the year. Monzo will also allow you to add activity from other accounts.
If you’re willing to pay a monthly fee for Monzo’s Business Pro or Team plans, then you’ll also be able to automatically put a percentage aside for tax every time you get paid into one of its Tax Pots.
Starling
Starling’s Making Tax Digital tool is available and integrated into its sole trader account. The tool automatically categorises your transactions and submit your updates directly to HMRC.
Its sole trader account also has receipt capture capabilities, and you can put money aside for taxes in one of Starling’s Spaces. MTD accounting software
Sage
Sage’s free MTD accounting software can be connected to 1 bank account. You’ll be able to add your income and expenses information from different sources like bank feeds, receipt capture and manual entry. These are then automatically categorised by Sage and made into digital records ready for MTD updates.
You’ll also have visibility of your tax liability with up-to-date estimates, so you’ll be able to plan ahead. Sage’s software is also designed so you can manage it yourself or share it with an accountant to review before making your final payment.
FreeAgent
Another standalone accounting software, FreeAgent’s end-to-end MTD solution is HMRC-recognised and ready now. It’s free for clients with Mettle, NatWest, RBS or Ulster Bank accounts, but it can also be connected to other banks to import transactions automatically.
It offers automatic categorisation and uses Open Banking to collect data from bank feeds. It’ll also let you submit quarterly updates and file final declarations directly to HMRC.
QuickBooks
QuickBooks uses AI to scan your bank feeds and automatically suggest tax categories and highlight duplicate expenses. It has real-time tax projections you can view via a dashboard and a tool which cross checks you data against HMRC’s specific rules to flag any potential errors before submission.
However, unlike Tide and Sage, there isn’t a free option available – although you can take advantage of a free trial for 30 days.
Xero
Xero’s MTD software lets you draft, test and submit returns directly to HMRC. Its dashboard will give you live data and recommend matches for reconciliation. Several business bank accounts integrate with Xero’s accounting software, so your transactions can be imported and categorised, to give you an up-to-date view of your tax liability.
There’s no free option available, but Xero does have 4 different pricing plans depending on what features you need.
What’s the difference between a business bank account and accounting software?
A business bank account actually holds your money and facilitates transactions, while accounting software is there for a record of your transactions and analyses the data for tax reporting.
If you’re looking for the easy option, then look at getting a business bank account with MTD-compliant accounting software built in. This will keep everything in one place and reduce your admin time. Not many business bank providers offer this. Currently, Tide is the only provider offering this service, but Monzo and Starling are due to launch their MTD tools soon.
HMRC-recognised software catering to sole traders
Software
Paid/Free
Type of software
Income sources
Quarterly MTD updates
6 Apr to 5 Apr accounting
1 Apr to 31 Mar accounting
!Coconut
Paid version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property
Ready now
Yes
Yes
!Coconut Free
Free version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property
Ready now
Yes
Yes
untied
Paid version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
#GoFile
Paid version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property
Ready now
Yes
Yes
123 Sheets
Paid version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
123 e-Filing MTD for Income Tax
Paid version
Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
@Taxd MTD
Paid version
Software that connects to your records (bridging software)
Sole trader, UK property
Ready now
Yes
Yes
AbraTax MTD for Income Tax
Free version
Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
No
Absolute Excel Income Tax Filer
Paid version
Software that connects to your records (bridging software)
Sole trader, UK property
Ready now
Yes
Yes
Accounting from Sage
Free version
Software that creates digital records
Sole trader
Ready now
Yes
Yes
Acorah Software Products Ltd (TaxCalc)
Paid version
Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
Acxite
Free version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
Ajaccts
Paid version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
Yes
Andica Accounting Software
Paid version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
Yes
ApariPro
Paid version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
Capium Limited — MTD for IT
Paid version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
Clear Books
Paid version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
Yes
Clear Books Free
Free version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
Yes
Forbes MTD
Paid version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
FreeAgent
Free version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
Yes
IRIS Elements Cashbook
Paid version
Software that creates digital records
Sole trader
Ready now
Yes
Yes
IRIS Kashflow
Paid version
Software that creates digital records
Sole trader
Ready now
Yes
Yes
Kletta
Free version
Software that creates digital records
Sole trader
Ready now
Yes
No
Landmark Systems – KEYPrime
Paid version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
Yes
Landmark Systems – KEYinfinity
Paid version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
Yes
MTD for iPhone & iPad
Paid version
Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
MTD for macOS
Paid version
Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
MYT
Paid version
Software that creates digital records
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
Monzo
Free version
Software that creates digital records
Sole trader
Ready now
Yes
Yes
My Tax Digital (Free)
Free version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
Neevii
Paid version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader
Ready now
Yes
Yes
Nomi
Free version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property
Ready now
Yes
Yes
Otis Tax
Paid version
Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
QuarterSEND
Paid version
Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
No
QuickBooks (Intuit)
Paid version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
Yes
QuickFile Accounting Software for MTD IT
Free version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
Yes
Qyon Software Ltd
Paid version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
RentalBux
Paid version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
RentalBux Free
Free version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
Self Assessment Direct
Free version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
SliQ Invoicing
Paid version
Software that creates digital records
Sole trader
Ready now
Yes
Yes
Starling
Free version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
No
StrideBooks
Paid version
Software that creates digital records
Sole trader
Ready now
Yes
Yes
TaxHeaven
Free version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
TaxNav
Free version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
TaxUpdates
Free version
Software that creates digital records, Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
Tide Accounting
Free version
Software that creates digital records
Sole trader
Ready now
Yes
Yes
VitalTax
Paid version
Software that connects to your records (bridging software)
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
Xero
Paid version
Software that creates digital records
Sole trader, UK property, Foreign property
Ready now
Yes
Yes
Zoho
Free version
Software that creates digital records
Sole trader, UK property
Ready now
Yes
No
What is bridging software?
Bridging software is a tool which connects your spreadsheets to HMRC. If you have existing bookkeeping methods, then this type of software can help you become MTD-compliant without having to change your processes.
There are several providers that offer this, including 123 sheets, Absolute Excel and VitalTax.
What should sole traders look for when choosing MTD software?
There are several key things you’ll need to look for as a sole trader choosing Making Tax Digital software.
HMRC-approved. It needs to be on the HMRC-approved list for MTD for Income Tax. You can use gov.uk’s software finder tool to see which providers have MTD-compliant software. Integration. To make the process smooth, look for tools which are built into your business bank account, like Tide’s, or which can integrate with your existing bank account, like Sage. Automation. Software that has automatic categorisation and uses AI to spot duplicate expenses will support seamless submissions. Tax estimates. Look for a tool which can provide you with real-time tax estimates so you can budget for your final tax bill.
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Kate Steere is an editor and money expert at Finder, specialising in banking, savings and fintech. She has previously written for The Motley Fool UK and Fitch Solutions, where she covered a wide range of personal finance topics and kept a close eye on market trends. Kate has a Bachelor of Arts in Modern History from the University of East Anglia. When not working, she can usually be found curled up with a good book or heading out for a run.
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