The best options, and what they cost (many are free).
From 6 April 2026, if your turnover (not profit) from self-employment and/or renting out property is more than £50,000, you have to use HMRC-approved software. And no more doing it all in January — you have to send an update 4 times a year instead.
The good news: it can be quick and many options are completely free. If you bank with NatWest, Starling, Monzo or Mettle, you may already qualify. Everyone else can use Sage or Clear Books at no cost.
Only 9% of people who need to sign up have done so. You are not late. But you need to sort it before 6 April.
Right now, you probably do your tax once a year — fill in a form and send it to HMRC every January. Job done.
MTD software is just an app on your phone or computer that replaces that form. Instead of one big form in January, you send HMRC a short summary of your income and spending 4 times a year. The app does the sending, you just keep your records in it.
You don't need to understand tax to use it.
Tap your business bank to find out.
Every product here is on HMRC's approved list. Costs are per month, ex-VAT. Last checked April 2026.
| Software | Monthly cost | Free? | Bank feed | Mobile app | Freelancers | Landlords |
|---|---|---|---|---|---|---|
| Xero Ignite | £16/mo | ✗ | ✓ | ✓ | ✓ | ✓ |
| QuickBooks Sole Trader | From £10/mo | ✗ | ✓ | ✓ best app | ✓ | ✗ sole trader only |
| FreeAgent | Free* or £19/mo | ✓ NatWest group | ✓ | ✓ | ✓ | ✓ |
| Starling | Free (account free) | ✓ Starling account | ✓ automatic | ✓ | ✓ | ✓ |
| Monzo Business | Free (account free) | ✓ Monzo account | ✓ automatic | ✓ | ✓ | ✓ |
| Sage Individual Free | Free | ✓ Any bank | ✓ | ✓ | ✓ | ✗ sole trader only |
| Clear Books | Free | ✓ Any bank | ✓ | ✗ | ✓ | ✓ |
| Coconut | Free | ✓ Any bank | ✓ | ✓ mobile-first | ✓ | ✓ |
| My Tax Digital | Free | ✓ Any bank | ✗ | ✗ | ✓ | ✓ |
| Sage Individual (paid) | £18/mo | ✗ | ✓ | ✓ | ✓ | ✗ sole trader only |
| HMRC's own tool | Free | ✓ Any bank | ✗ | ✗ | ✓ | ✓ |
* FreeAgent is free with a NatWest, RBS, Ulster Bank or Mettle business account (min. one transaction/month). Without that bank, it costs £19/month.
Don't pay for something if you don't have to. Here's every free option and exactly what it costs.
Free with NatWest group
The most complete free option out there. If you bank with NatWest or its brands, you get the full product for nothing — invoicing, expenses, bank feed, quarterly MTD submissions and your Self Assessment all in one place.
Your accountant can access it directly too, which makes life easier at year end.
Free
Starling built MTD directly into their banking app. Already a Starling customer? Open the app, go to the Accounting section — that's your MTD software. Your transactions pull through automatically.
Don't have Starling? Opening an account is free and takes about 10 minutes.
Free
Monzo built their MTD tool into the business banking app, powered by Sage. Already a Monzo Business customer? Check the app for the tax section. Not a customer? Opening an account is free and takes around 10 minutes.
The full tool should be live MTD for Income Tax started on 6 April 2026. If you haven’t signed up yet, don’t panic — sign up now through your chosen software and get your first quarterly update submitted by 7 August 2026..
Free — any bank
Don't want to switch banks? Sage's free plan works with whatever bank you've already got. No trial period, no revenue limit. You get digital record keeping, a bank feed and full MTD quarterly submissions.
It's basic though — only works for non-VAT sole traders. No property income. No support unless you upgrade.
Free — any bank
Free plan with no revenue cap. Works for both sole traders and landlords. One-click quarterly submissions and AI-powered expense sorting built in.
No mobile app — so if you do your bookkeeping on your phone while you're out, this one's less ideal.
Free — any bank
Coconut is a mobile-first app built specifically for sole traders and landlords. HMRC-approved for MTD Income Tax. It combines invoicing, digital receipt capture and real-time tax updates in one simple app — designed for people who aren't accountants.
Good option if you want something that feels more like a modern app than traditional accounting software. The free plan covers the MTD basics.
Free — any bank
A free, browser-based tool trusted by tens of thousands of UK businesses. Covers MTD for Income Tax for sole traders and landlords — including self-employment, UK property and foreign property income. Also works as bridging software if you want to keep using a spreadsheet.
No app to download — just log in through any browser. Good option if you want something simple with no costs at all.
Free — on GOV.UK
HMRC built a very basic free tool for very simple situations: one income source, simple expenses. It covers the legal MTD requirements and nothing else.
No bank feed, no app, no invoicing, no support. For most people, one of the options above will work much better.
The free options cover compliance. These paid options add invoicing, expenses, VAT, accountant access and full reporting, all in one place. Both have free trials.
Used by most UK accountants. Best app ecosystem. Covers everything — MTD, VAT, invoicing, expenses, property income.
Cheapest paid option. Best mobile app — snap receipts, log mileage, track expenses on the go. Often 50% off for 6 months.
Paid
from £16/month
Most UK accountants use Xero — if you've got an accountant, ask them first. Chances are they're already on it, which makes sharing your records much easier.
Does everything: MTD, VAT, invoicing, expenses, bank feed, property income. Best range of connections with other apps.
Paid
from £10/month
Cheapest major paid option. The mobile app is the best of the lot — great for snapping receipts, logging materials and tracking mileage while you're out on the job.
Watch out: the Sole Trader plan doesn't cover VAT. If you're VAT-registered, step up to Simple Start at £16/month. Also no property income on this plan.
This year (2026/27) there are no penalty points for late quarterly submissions. HMRC called it a soft landing. But miss your year-end submission and you can still get a £200 fine.
From 2027/28 it all counts. Miss a deadline = 1 point. Hit 4 points = £200 fine. Keep missing = £200 per extra point on top.
HMRC won't sign you up automatically. Even if you got a letter, you still need to register yourself through whatever software you pick.
Same basics, different details. These pages cover what matters most for each job — think CIS, VAT, materials, mixed income.
Four times a year:7 August · 7 November · 7 February · 7 MayThese are quick summaries — not full tax returns. You still pay your tax once a year by 31 January.