Which MTD software is actually worth paying for?

From 6 April 2026, sole traders and landlords earning over £50,000 must use HMRC-approved software to submit quarterly tax updates under Making Tax Digital for Income Tax (MTD for ITSA). That means spreadsheets and paper records are out — and the clock is ticking.

But not all MTD software is created equal. Some are built for small business owners with zero accounting knowledge. Others are powerful but overkill — and priced accordingly. This guide cuts through the noise.

We've compared the six most popular HMRC-recognised options on price, ease of use, MTD readiness, and which type of sole trader each one suits best.

Quick summary: who each one suits

  • QuickBooks Simple Start — best all-rounder for most sole traders
  • FreeAgent — best if you use NatWest, RBS, or Mettle
  • Xero Starter — best for creatives and freelancers who invoice regularly
  • Sage Accounting Start — best for tradespeople who already know Sage
  • FreshBooks Lite — best for service businesses who send lots of invoices
  • GoSimpleTax — best for very simple, low-cost MTD compliance

What MTD software actually needs to do

Under MTD for ITSA, you must submit four quarterly updates to HMRC each tax year, plus a final end-of-period statement. Your software handles all of this — it connects directly to HMRC's systems so you never have to log in to HMRC yourself.

At minimum, your MTD software needs to: record your income and expenses digitally, categorise them correctly for HMRC, and submit your quarterly updates on time. Some tools do a lot more. Whether that's useful or just complexity depends entirely on your situation.

1. QuickBooks Simple Start — £10/month

Best for: Most sole traders who want a reliable, well-supported option with room to grow.

QuickBooks is the market leader for a reason. It's genuinely easy to use, has excellent mobile app support, and is fully MTD for ITSA ready. You can snap receipts on your phone, connect your bank account for automatic transaction import, and track income and expenses in real time.

Pricing

  • Simple Start: £10/month (often discounted to £4/month for 6 months)
  • Essentials: £25/month (adds bill management and multi-currency)
  • Plus: £35/month (for more complex businesses)

Pros

  • Extremely polished, easy-to-navigate interface
  • Excellent mobile app — ideal for tracking on the go
  • Strong bank feed integration across most UK banks
  • Large user community and lots of accountant support
  • MTD for ITSA submissions confirmed for April 2026

Cons

  • Simple Start limits you to one user — no accountant access without upgrading
  • Price increases have been frequent in recent years
  • Can feel feature-heavy if you only need basic compliance

If you want one option that will work reliably for the long term and integrates with pretty much everything, QuickBooks is the safe bet. Compare MTD software to see how it stacks up on price.

2. FreeAgent — £19/month (free with some bank accounts)

Best for: Sole traders who bank with NatWest, RBS, or use Mettle — because you get FreeAgent free as part of your account.

FreeAgent is one of the most MTD-mature platforms available. It's been building toward MTD for ITSA for years and has a clean, approachable interface that's well suited to people without an accounting background. It handles invoicing, expense tracking, bank reconciliation, and tax estimates in one place.

Pricing

  • £19/month for sole traders (standalone)
  • Free with NatWest, Royal Bank of Scotland, or Mettle business accounts

Pros

  • Free if you already bank with NatWest or RBS — genuinely excellent value
  • Built-in tax timeline so you always know what's due and when
  • Very strong invoicing features
  • Friendly, jargon-free interface
  • Good accountant collaboration tools

Cons

  • £19/month is expensive compared to alternatives if you're paying standalone
  • Less well-known outside the NatWest ecosystem
  • Some advanced features locked behind the full business plan

If you're already a NatWest or Mettle customer, this is almost certainly your best option — free, capable, and MTD-ready.

3. Xero Starter — £16/month

Best for: Freelancers and creatives who invoice clients regularly and want a polished, design-forward platform.

Xero has a strong following among creative professionals and consultants. Its interface is clean and modern, and it handles invoicing particularly well — including automatic payment reminders and online payment links. The Starter plan covers the basics comfortably for most sole traders.

Pricing

  • Starter: £16/month (20 invoices/month, 5 bills)
  • Standard: £33/month (unlimited invoices)
  • Premium: £47/month (multi-currency)

Pros

  • Genuinely beautiful, intuitive interface
  • Excellent invoice management and payment tracking
  • Strong accountant ecosystem — many UK accountants know Xero well
  • Robust bank reconciliation tools
  • MTD for ITSA ready

Cons

  • Starter plan limits of 20 invoices/month can catch you out if you invoice frequently
  • More expensive than QuickBooks at comparable tiers
  • Payroll costs extra

Xero works best when your accountant is already on the platform. If they are, this is a very smooth experience. Compare MTD software pricing side by side before committing.

4. Sage Accounting Start — £14/month

Best for: Tradespeople or contractors who already use Sage products and want continuity.

Sage has been a fixture in UK business accounting for decades, and Sage Accounting (formerly Sage Business Cloud) is their cloud-based product built for small businesses. It's MTD for ITSA compliant and integrates tightly with other Sage tools.

Pricing

  • Accounting Start: £14/month
  • Accounting: £28/month (adds cash flow forecasting, invoice chasing)

Pros

  • Trusted UK brand with strong support infrastructure
  • MTD for ITSA confirmed
  • Good for businesses that already use Sage Payroll or other Sage products
  • Solid bank reconciliation and expense tracking

Cons

  • Interface feels dated compared to QuickBooks or Xero
  • Less intuitive for people with no prior accounting experience
  • Sage's pricing history includes unexpected increases — watch the contract terms
  • Some features that should be basic require upgrading to the higher tier

Sage is a solid choice if you're already in their ecosystem. For most sole traders starting from scratch, QuickBooks or FreeAgent will feel more natural.

5. FreshBooks Lite — £15/month

Best for: Service-based sole traders — coaches, consultants, therapists — who live and die by their invoices.

FreshBooks started life as invoicing software and it still does that better than almost anyone else. Its client-facing features are polished, and the time-tracking tools are genuinely useful if you bill by the hour. It's a newer entrant to the MTD space but has confirmed ITSA compliance for 2026.

Pricing

  • Lite: £15/month (5 active clients)
  • Plus: £25/month (50 clients)
  • Premium: £35/month (unlimited clients)

Pros

  • Best-in-class invoicing experience
  • Built-in time tracking — very useful for hourly billing
  • Clients can pay directly from invoices (Stripe, GoCardless)
  • Clean, approachable interface

Cons

  • Lite plan limits you to 5 active clients — restrictive for many
  • Less depth on the bookkeeping/accounting side compared to QuickBooks or Xero
  • MTD for ITSA integration is newer and less battle-tested
  • Bank reconciliation features are less mature than competitors

If invoicing is central to how you work and you have a small client base, FreshBooks is a joy to use. If you need robust bookkeeping or have more than five clients on the go, you'll hit the ceiling quickly.

6. GoSimpleTax — from £49/year

Best for: Very simple situations — a sole trader with minimal transactions who just wants to stay compliant at the lowest possible cost.

GoSimpleTax is different from the others here. Rather than full cloud accounting software, it's focused purely on tax return and MTD submission functionality. There's no invoicing, no bank feeds, no full bookkeeping suite — just a clean tool for recording income and expenses and filing with HMRC.

Pricing

  • From £49/year for Self Assessment
  • MTD for ITSA pricing not yet finalised — check their site for updated plans

Pros

  • By far the cheapest option if your tax affairs are simple
  • No subscription bloat — you're paying for compliance, not features you won't use
  • Very easy to use for non-accountants
  • HMRC recognised

Cons

  • No invoicing or full bookkeeping features
  • No bank feed integration — you enter transactions manually
  • MTD for ITSA quarterly submission features are still maturing
  • Not suitable if you have complex income, multiple properties, or need to collaborate with an accountant

GoSimpleTax is worth serious consideration if you're a sole trader with straightforward finances — a single income stream, a handful of expenses — and you just need to hit the MTD compliance requirement without paying £150+ a year for features you'll never touch.

How to choose: a quick decision guide

  • Bank with NatWest, RBS, or Mettle? → Get FreeAgent free and stop there.
  • Want the safest, most-supported all-rounder? → QuickBooks Simple Start.
  • Freelancer who invoices clients? → Xero Starter or FreshBooks, depending on client volume.
  • Already in the Sage ecosystem? → Sage Accounting Start.
  • Very simple finances, minimum cost? → GoSimpleTax.

What about free software?

HMRC does not offer its own MTD for ITSA filing tool for sole traders (unlike the current Self Assessment return). Some free tools may emerge as the deadline approaches, but at time of writing, there is no reliable free option that covers the full quarterly submission requirement. Budget for at least £10–20/month, or explore the NatWest/FreeAgent route if free is essential.

Don't wait until April 2026

The worst time to set up new accounting software is the week before a compliance deadline. If you're in the first wave (income over £50,000), you should be testing your chosen platform now — ideally running parallel records for a quarter before you're legally required to submit.

Setting up bank feeds, categorising your transaction history, and getting familiar with the quarterly submission process all take time. Give yourself that time.

Compare MTD software options side by side and find the right fit for your business before the rush starts.

Ready to choose your MTD software?

Compare HMRC-approved options side by side — find the right fit for your business.

Compare Software →