Best Making Tax Digital (MTD) software for sole traders

Discover the best HMRC-recognised and sole trader-approved MTD software.

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Kate Steere

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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

Monzo’s Making Tax Digital software allows you to file directly to HMRC, categorise transactions, attach receipts and save for tax during the year. Monzo will also let 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.

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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, Starling and Monzo are the providers that have MTD tools available.

HMRC-recognised software catering to sole traders

SoftwarePaid/FreeType of softwareIncome sourcesQuarterly MTD updates6 Apr to 5 Apr accounting1 Apr to 31 Mar accounting
!CoconutPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK propertyReady nowYesYes
!Coconut FreeFree versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK propertyReady nowYesYes
@Taxd MTDPaid versionSoftware that connects to your records (bridging software)Sole trader, UK propertyReady nowYesYes
#GoFilePaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK propertyReady nowYesYes
100PcMTDPaid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
11TaxAssistPaid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
123 e-Filing MTD for Income TaxPaid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
123 SheetsPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
A1Taxfiler MTD for Income TaxPaid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
Ablegatio Ftax MTD for ITPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
AbraTax MTD for Income TaxPaid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesNo
Absolute Excel Income Tax FilerPaid versionSoftware that connects to your records (bridging software)Sole trader, UK propertyReady nowYesYes
Accounting from SageFree versionSoftware that creates digital recordsSole traderReady nowYesYes
Acctax (Online) LtdPaid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
Acorah Software Products Ltd (TaxCalc)Paid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
AcxiteFree versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
Adminsoft AccountsFree versionSoftware that creates digital recordsSole trader, UK property, Foreign propertyReady nowYesYes
AjacctsPaid versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
Andica Accounting SoftwarePaid versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
ANNA Self AssessmentFree versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK propertyReady nowYesYes
ApariProPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
BriefcasePaid versionSoftware that creates digital recordsSole trader, UK property, Foreign propertyReady nowYesYes
Capium Limited — MTD for ITPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
Clear BooksPaid versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
Clear Books FreeFree versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
CrunchPaid versionSoftware that creates digital recordsSole traderReady nowYesNo
DIY TaxPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesNo
EasyInvoicePaid versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
Forbes MTDPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
FreeAgentFree versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
Invoice GuruPaid versionSoftware that creates digital recordsSole traderReady nowYesNo
IRIS Elements CashbookPaid versionSoftware that creates digital recordsSole traderReady nowYesYes
IRIS KashflowPaid versionSoftware that creates digital recordsSole traderReady nowYesYes
KlettaPaid versionSoftware that creates digital recordsSole trader, UK property, Foreign propertyReady nowYesNo
Landmark Systems – KEYinfinityPaid versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
Landmark Systems – KEYPrimePaid versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
LimeBooksPaid versionSoftware that creates digital recordsSole trader, UK property, Foreign propertyReady nowYesYes
Lloyds BankFree versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
MonzoFree versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
MTD 4 Income TaxPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
MTD for iPhone & iPadPaid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
MTD for macOSPaid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
MTDsortedPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole traderReady nowYesYes
My Tax Digital (Free)Free versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
MYTPaid versionSoftware that creates digital recordsSole trader, UK property, Foreign propertyReady nowYesYes
NeeviiPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole traderReady nowYesYes
NomiPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK propertyReady nowYesYes
Otis TaxPaid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
Powered NowPaid versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
QuickBooks (Intuit)Paid versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
QuickFile Accounting SoftwareFree versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes
Qyon Software LtdPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
RentalBuxPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
RentalBux FreeFree versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
Self Assessment DirectFree versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
SliQ InvoicingPaid versionSoftware that creates digital recordsSole traderReady nowYesYes
StarlingFree versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesNo
StrideBooksPaid versionSoftware that creates digital recordsSole traderReady nowYesYes
TaxDashPaid versionSoftware that creates digital recordsSole trader, UK property, Foreign propertyReady nowYesNo
TaxHeavenFree versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
TaxNavPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
TaxUpdatesFree versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
TaxzapPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesNo
Tide AccountingFree versionSoftware that creates digital recordsSole traderReady nowYesYes
untiedPaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
VitalTaxPaid versionSoftware that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
VT SoftwarePaid versionSoftware that creates digital records, Software that connects to your records (bridging software)Sole trader, UK property, Foreign propertyReady nowYesYes
XeroPaid versionSoftware that creates digital recordsSole trader, UK property, Foreign propertyReady nowYesYes
ZohoFree versionSoftware that creates digital recordsSole trader, UK propertyReady nowYesYes

Note: The table above incorporates software that’s suitable for sole-trader income (some software only caters to landlords). The table above incorpotates software that is suitable to be used by the sole trader themselves (rather than an agent working on their behalf). Source: HMRC Making Tax Digital software Finder at 21 April 2026.

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.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables is provided by Defaqto. In other cases, Finder has sourced data directly from providers.
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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. See full bio

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