Making Tax Digital for Income Tax becomes mandatory from April 2026, and every affected sole trader and landlord needs compatible software. The problem? Most options are either expensive, restrictive, or designed for businesses with needs far beyond simple quarterly reporting. (Not sure what MTD actually is? Start with our plain-English explanation.)
We've compared every HMRC-recognised MTD software option and sorted them by what you'll actually pay. No promotional pricing, no introductory offers - the real annual cost.
First — do you actually need MTD software? Use our free eligibility checker to confirm MTD applies to you before spending anything.
The quick comparison: every option by price
Here's the full picture, sorted from cheapest to most expensive. All prices include VAT where applicable.
| Software | Annual Cost | Type |
|---|---|---|
| AffordableMTD | £0 first year, then £19.99/yr | Bridging + AI |
| Clear Books Free | £0 | Full |
| QuickFile | £0 | Full |
| Sage Individual | £0 | Full |
| Hammock Basic | £0 | Full |
| RentalBux | £0 | Full |
| FreeAgent | £0 | Full |
| 123 Sheets | £23.40 | Bridging |
| VitalTax | £36.00 | Bridging |
| GoSimpleTax | ~£58 | Full |
| EasyBooks | ~£84 | Full |
| Hammock Premium | £96 | Full |
| Coconut MTD | £108 | Full |
| Untied | ~£120 | Full |
| Sage Start | £144 | Full |
| Clear Books Paid | £144 | Full |
| QuickBooks | £168 | Full |
| Xero Starter | £180 | Full |
| FreeAgent | £288 | Full |
The "free" options - and their catches
On paper, there are several free MTD software options. In practice, every single one has a significant restriction. Let's go through them honestly.
Clear Books Free
The most genuinely useful free option. Covers both self-employment and property income. Supports quarterly updates and tax return submission. No bank account requirement, no transaction limit.
The catch? No bank feeds, limited reporting, and a basic interface. Clear Books will nudge you towards their £12/month paid plan regularly. But for pure MTD compliance, the free tier does work.
Best free option if you can live without bank feeds and don't mind basic reporting.
QuickFile
Popular with small UK businesses. Offers invoicing and Open Banking bank feeds on the free tier. MTD for Income Tax support is available.
The catch is the 1,000-transaction cap per rolling 12-month period. If you have a business bank account with regular transactions, you'll hit this limit surprisingly quickly. After that, you're looking at £45/year or more.
Good if your transaction volume is genuinely low. Risky if you're not sure.
FreeAgent (with NatWest/RBS/Mettle)
FreeAgent is a full-featured accounting platform and one of the best options in the market. It's genuinely free if you hold a NatWest, RBS, Ulster Bank, or Mettle business bank account (with at least one transaction per month).
If you don't bank with one of those providers, FreeAgent costs £24/month (£288/year) - making it the most expensive option on this list. Switching your business bank account just to get free software isn't a trivial decision.
Incredible deal if you already bank with NatWest/RBS. Irrelevant if you don't.
Sage Individual
Sage's free tier covers quarterly updates for self-employment income. That's it. No property income. No end-of-year final declaration. No support for landlords at all.
If you're a sole trader with no rental income and you're happy handling the final declaration elsewhere, this works. For everyone else, it's too limited.
Only viable if you're purely self-employed with no property income.
Hammock Basic
Purpose-built for landlords, with free MTD quarterly submissions. Good interface, straightforward setup.
The opposite problem to Sage: it only handles property income. If you're a landlord with no self-employment income, this is a solid free option. If you have both, you'd need a second product for your self-employment - and that second product would also need to be MTD-compatible.
Good for landlords who don't have self-employment income. Useless for everyone else.
The frustrated user scenario: You earn £55,000 from self-employment and £12,000 from rental income. Sage won't do your property. Hammock won't do your self-employment. Clear Books Free has limited features. FreeAgent needs NatWest. You just want one product that handles both income types without costing a fortune.
The cheapest paid options
If the free tiers don't fit your situation, here's what the cheapest paid options look like.
AffordableMTD
Bridging software with AI transaction categorisation. Supports both self-employment and property income. Upload your spreadsheet or CSV, AI categorises your transactions into HMRC expense categories, you review and submit. Web interface, no bank account requirement, no transaction limits.
Completely free for the entire 2026-27 tax year - all features, all income types, no catches. From April 2027, just £19.99/year - the cheapest MTD software in the UK.
The cheapest MTD software in the UK. Free for 2026-27, then the lowest-priced paid option from 2027-28. Full disclosure: this is our product.
123 Sheets
The market leader in MTD bridging software. Works with your existing spreadsheets. Claims to handle 33% of all quarterly submissions. ISO27001 certified, 5-star Trustpilot average from 900+ reviews.
The product is purely a bridge - it has no record-keeping features, no AI, no web interface, and no help deciding whether an expense is allowable. You manage everything in your spreadsheet, and 123 Sheets submits it.
Proven and well-reviewed. If you want the absolute minimum with zero extra features, this works.
VitalTax
An Excel add-in that submits your spreadsheet data to HMRC. Even more basic than 123 Sheets - works entirely within Excel.
Only consider if you specifically want an Excel plug-in and don't mind paying more than 123 Sheets for fewer features.
The big accounting platforms - and why you probably don't need one
Xero (£180/year), QuickBooks (£168/year), Sage (£144/year), and FreeAgent (£288/year without partner bank) are all excellent products. They offer invoicing, bank feeds, payroll, multi-currency, project tracking, and dozens of other features.
They're also massive overkill if all you need is MTD compliance. If you're a sole trader who tracks income and expenses in a spreadsheet and files one tax return a year, paying £15-24/month for features you'll never touch is hard to justify.
The question to ask yourself: "Am I paying for MTD compliance, or do I genuinely need accounting software?" If the answer is MTD compliance, a bridging tool at £20-£24/year does the same job for a tenth of the price.
Which one should you choose?
Here's the decision tree:
If you only have self-employment income: Sage Individual (free) handles the quarterly updates. You'll need something else for the annual final declaration.
If you only have property income: Hammock Basic (free) is purpose-built for landlords and covers MTD submissions.
If you have both self-employment and property income: This is where most free options fall down. (See our landlord-specific guide for more detail on property income.) Your cheapest options are Clear Books Free (if you can accept the limitations), AffordableMTD (free for 2026-27, then just £19.99/year - the cheapest in the UK), or 123 Sheets (£23.40/year without AI).
If you bank with NatWest/RBS: FreeAgent is free for you and it's a full accounting platform. Take it.
If you want the least possible hassle and don't mind paying: Xero Starter at £15/month gives you everything including bank feeds, invoicing, and a massive ecosystem of add-ons and accountant support.
The simple, affordable option
Free for the entire 2026-27 tax year. Just £19.99/year from April 2027 - the cheapest MTD software in the UK. Both income types, AI categorisation, no catches.
Join the WaitlistPrices verified from provider websites as of March 2026. Pricing may change - always check the provider's website for current pricing. AffordableMTD is our own product and we've tried to be transparent about that throughout.