Best MTD for Income Tax software UK 2026: compared

There is no single best MTD for Income Tax software; the right product depends on your income sources, whether you are VAT registered and how you keep records. This page compares nine products from their own websites, checked on 6 November 2026, listed alphabetically. Prices range from free to £19 a month excluding VAT for a sole trader plan.

What must MTD software do?

Your software must keep digital records, send quarterly updates and submit your tax return. GOV.UK’s software guidance, updated 13 July 2026, says recognised software must:

• create, store and correct digital records of self-employment and property income and expenses
• send quarterly updates to HMRC
• let you add other income and submit your tax return by 31 January after the tax year

You can use more than one product, such as a spreadsheet plus bridging software, but only one product for each submission. HMRC does not recommend any provider. More detail is in MTD software requirements.

MTD software prices compared

Prices are standard list prices from each provider’s site on 6 November 2026, excluding VAT unless stated. Products are in alphabetical order. This is not a ranking.

Product notes

Affordable MTD. Affordable MTD is free for the 2026-27 tax year and £19.99 a year from 2027-28. It covers self-employment and UK property income, but not foreign property yet. It supports standard and calendar quarters.

Clear Books. The Clear Books free plan has no transaction limits and prepares the final declaration from your four updates. It covers UK and overseas lets and includes CIS. Landlords with a sole trade need a second free account under the same login. Paid plans from £5 a month add VAT, multi-user access and payroll.

FreeAgent. FreeAgent’s sole trader plan is £19 a month, or £190 a year, and says it lets you “submit quarterly updates and file your final declaration directly to HMRC”. New customers get 50% off for six months. It is free with a NatWest, RBS or Ulster Bank business current account, or a Mettle account used at least once a month.

My Tax Digital. My Tax Digital describes itself as free MTD software for Income Tax and VAT. It covers self-employment, UK property and foreign property, and has a bridging mode for spreadsheets. Its homepage does not mention the final declaration.

Pandle. Pandle lists “MTD Income Tax Submissions” on its free plan with no usage limits. Pandle Pro is £5 a month plus VAT. Its feature page does not say which income types or year-end steps are covered.

QuickBooks. QuickBooks offers Sole Trader Plus for businesses not registered for VAT and Simple Start for VAT-registered ones. Its pricing page showed “Loading live prices” rather than figures when checked, so confirm the price directly.

Starling. Starling’s MTD tool is free with its sole trader account and covers self-employment and property income. It sends quarterly updates, but the end-of-year declaration was listed as “coming soon”. VAT returns need Accounting Plus at £14 a month, discounted to £7 until April 2027.

Xero. Xero Simple is £7 a month after 90% off for six months. It is for non-VAT-registered businesses and allows 10 invoices, with no bill entry. Xero says quarterly returns and final declarations are built in. VAT-registered users need a Business Edition plan, from £18 a month.

Zoho Books. Zoho Books Free allows 1,000 invoices and 1,000 expenses a year. Zoho says the free plan can send quarterly updates, report other income and submit the final return. Paid plans start at £12 a month.

We could not check Sage or Lloyds Bank. Sage’s site blocked our checks and the Lloyds page returned an error on 6 November 2026.

Which suits you?

Use these rules of thumb, then confirm on HMRC’s software finder.

• If you are not VAT registered and your affairs are simple, a free plan or Xero Simple may cover you. See free MTD software.
• If you are VAT registered, you need a plan that also does MTD for VAT, such as QuickBooks Simple Start or a Xero Business Edition plan.
• If you have foreign property, check support first; Affordable MTD does not cover it yet.
• If you keep spreadsheets, look at bridging software. See MTD bridging software.
• If you are a landlord, read MTD for landlords.

How to choose: a checklist

1. List your income sources. Self-employment, UK property, foreign property and any other income for the return.
2. Check the final declaration. Make sure the product files the tax return, not just quarterly updates.
3. Check your quarters. Standard tax year quarters or calendar quarters.
4. Check VAT. If registered, you need MTD for VAT too.
5. Check agent access if an accountant files for you.
6. Price the full year after any introductory offer ends. See accounting software prices.
7. Search the product in HMRC’s finder before you sign up for MTD.

Frequently asked questions

Does HMRC provide free MTD for Income Tax software?

No. HMRC does not make its own software. It says free products are available for people with simple tax affairs, but they may have usage limits.

What is the cheapest MTD for Income Tax software?

Several products list free plans, including Clear Books, Pandle and Zoho Books. Check each covers your income types and the final declaration.

Can I use spreadsheets for MTD for Income Tax?

Yes, if you link them to bridging software that sends your updates and return to HMRC.

Does Xero do the MTD final declaration?

Xero says quarterly returns and final declarations are built into Xero, including its Simple plan at £7 a month.

How do I check if my software is MTD compatible?

Use HMRC’s software finder tool on GOV.UK, which asks about your needs and returns a list of recognised products.