Key takeaways
- Wave is not on HMRC's list of software for Making Tax Digital for VAT, checked on 6 November 2026, so it cannot submit VAT returns to HMRC by itself.
- Wave lists its prices in US and Canadian dollars only: Starter is free and Pro is $19 USD a month.
- Sole traders and landlords with qualifying income over £30,000 must use MTD for Income Tax software from 6 April 2027, and over £20,000 from 6 April 2028.
- Zoho Books has a £0 plan that files MTD VAT returns and supports MTD for Income Tax, capped at 1,000 invoices a year.
- Clear Books offers free MTD for Income Tax plans for sole traders and landlords; MTD VAT starts on its £15 a month Sole Trader Plus plan.
- FreeAgent is free with a NatWest, RBS or Ulster Bank business account, or £19 a month plus VAT for sole traders after the introductory offer.
- Bridging software lets you keep records elsewhere and submit through an HMRC-recognised product, but every transfer must use a digital link, not retyping.
Wave is free invoicing and bookkeeping software built for North America, and it cannot send VAT returns or Making Tax Digital (MTD) income tax updates to HMRC. If you are VAT registered, or you are a sole trader or landlord coming into MTD for Income Tax, you need either HMRC-recognised software or bridging software. This page lists UK alternatives with free or low-cost plans, in alphabetical order, with prices checked on 6 November 2026.
Does Wave work with Making Tax Digital?
No. Wave does not appear on HMRC’s list of software for MTD for VAT when we searched it on 6 November 2026. Wave’s community forum has described a VAT100 report that you can export and upload to separate bridging software, but Wave itself does not connect to HMRC.
Wave’s pricing page shows prices in US and Canadian dollars only: Starter is free and Pro is $19 USD a month. We found no Wave statement that its payments or payroll work in the UK.
Who needs MTD software?
You need MTD-compatible software if either of these applies to you.
- You are VAT registered. VAT Notice 700/22 requires all VAT-registered businesses to keep digital records and file VAT returns using software.
- You are a sole trader or landlord above the MTD for Income Tax threshold. The dates are in the table below.
| Qualifying income in | Over | MTD for Income Tax from |
|---|---|---|
| 2024/25 | £50,000 | 6 April 2026 |
| 2025/26 | £30,000 | 6 April 2027 |
| 2026/27 | £20,000 | 6 April 2028 |
These thresholds come from GOV.UK’s eligibility guidance, updated 26 March 2026. Qualifying income is your combined self-employment and property turnover before expenses. Use our MTD checker to see your own start date.
UK alternatives to Wave compared
Each provider below says on its own pricing page that it supports MTD, and each appears on HMRC’s software list (Zoho is listed as “Zoho”). Prices exclude VAT and were checked on 6 November 2026.
| Software | Cheapest plan | MTD coverage on that plan |
|---|---|---|
| Clear Books | £0 (Sole Trader Free) | MTD for Income Tax |
| FreeAgent | £0 with eligible bank account | VAT and Income Tax |
| Pandle | £0 (Pandle); Pro £5 a month | VAT and Income Tax on Pro |
| Xero | £18 a month (Ignite) | VAT and Income Tax |
| Zoho Books | £0 (Free) | VAT and Income Tax |
Clear Books
Clear Books has free Sole Trader, Property and Foreign Property plans that cover MTD for Income Tax quarterly updates and the year-end return. MTD VAT reporting starts on Sole Trader Plus at £15 a month. Limited companies start on Small at £16 a month, and MTD VAT submissions start on Medium at £34 a month.
FreeAgent
FreeAgent is free for as long as you hold a business current account with NatWest, Royal Bank of Scotland or Ulster Bank. Sole trader, limited company and landlord users can also get it free with a Mettle account used at least once a month. Otherwise the sole trader plan is £19 a month and the limited company plan is £33 a month, with half price for the first six months. See FreeAgent pricing for every plan.
Pandle
Pandle has a free plan and a Pro plan at £5 a month plus VAT, with no contract. Its pricing page lists VAT return and MTD for Income Tax submissions under Pro, so check the free plan before relying on it for filing.
Xero
Xero has no free plan. Ignite costs £18 a month, limited to 20 invoices and 10 bills, and Grow costs £39 a month. All four plans include VAT return submission and are listed as MTD for Income Tax ready. See Xero pricing.
Zoho Books
Zoho Books has a £0 plan for one user plus an accountant. It files MTD VAT returns and supports MTD for Income Tax, with limits of 1,000 invoices and 1,000 expenses a year. Paid plans start at £12 a month, or £10 a month billed annually.
Which option fits you?
- If you are a sole trader or landlord who is not VAT registered, look first at the free MTD for Income Tax plans from Clear Books and Zoho Books.
- If you are VAT registered and want to pay nothing, Zoho Books Free files MTD VAT returns, and FreeAgent is free with an eligible bank account.
- If you run a limited company, compare FreeAgent, Xero, Zoho Books and the Clear Books company plans; our guide to free accounting software covers more options.
- If you want to keep Wave for invoicing, you can submit through bridging software, but you must move data by digital link, such as a CSV import. HMRC does not accept retyping or copy and paste.
How to move from Wave
- Export customers, suppliers, invoices and transactions from Wave as CSV files.
- Pick a cut-off date, ideally a VAT quarter end or tax year end.
- Connect your bank feed and enter opening balances at the cut-off.
- Import the CSV data and check the trial balance against Wave’s.
- Authorise the new software with HMRC before your next filing.
Our switching guide covers each step.
Frequently asked questions
Can I file a UK VAT return from Wave?
No. Wave is not on HMRC’s MTD for VAT software list. You would need to export a report and submit it through HMRC-recognised bridging software.
What is the cheapest MTD-compatible alternative to Wave?
Zoho Books, Clear Books (for MTD for Income Tax) and Pandle all have £0 plans, and FreeAgent is free with a NatWest, RBS or Ulster Bank business account. Check which MTD features each free plan includes.
Do I need MTD software if I am not VAT registered?
Only if you are a sole trader or landlord with qualifying income over the MTD for Income Tax threshold: £50,000 from April 2026, £30,000 from April 2027 and £20,000 from April 2028.
Can I keep Wave and use bridging software?
Yes, as long as data moves from Wave to the bridging software by a digital link such as a CSV import. Manually retyping figures does not meet HMRC’s digital links rule.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 6 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.