Sage has a free plan for Making Tax Digital for Income Tax, called Sage Sole Trader Free, and a paid plan at £7 a month plus VAT. Both are for sole traders and landlords who aren’t VAT registered, and both send quarterly updates to HMRC. The open question with Sage MTD software is the end-of-year tax return, which is covered below.
Sage MTD plans compared
| Sage Sole Trader Free | Sage Sole Trader | |
|---|---|---|
| Price | Free | £7 a month plus VAT, after 90% off for 6 months |
| For VAT-registered businesses | No | No |
| Sales invoices | 5 a month | Unlimited |
| Bank accounts connected | 1 | More than one |
| Auto-categorised transactions | 25 | Unlimited |
| Receipts | Entered by hand | Snap and scan |
| Quarterly updates to HMRC | Yes | Yes |
| Records landlord income | Yes | Yes |
Sage says the free plan has no billing and no time limit. If you’re VAT registered, Sage points you to its Sage Accounting plans, which start at £20 a month plus VAT. We haven’t confirmed what those plans include for Income Tax.
Can Sage send your end-of-year tax return?
This is the thing to check before you rely on Sage. Sage’s marketing pages say you can finalise and submit your end-of-year return. But a reply from Sage staff on its own community forum said the rollout of that feature had been delayed and was showing as “coming soon” in the product. We couldn’t confirm it is live for everyone.
Quarterly updates aren’t affected. Before your first tax return under Making Tax Digital is due, on 31 January after the tax year ends, ask Sage whether your plan can send it.
Sage MTD for landlords
Both plans let you record landlord income and expenses. When you set up, Sage accepts a UK property business and asks for your percentage share of a jointly owned property.
We couldn’t confirm whether Sage Sole Trader handles overseas property, or whether one subscription covers both self-employment and rental income. Ask Sage if either applies to you.
How to connect Sage to HMRC
Sage’s help pages give these steps for Sage Sole Trader:
- Sign up for Making Tax Digital for Income Tax with HMRC, and wait for the confirmation email.
- In Sage, open Income Tax and choose the option that says you’re already set up.
- Select Connect to HMRC and sign in with your Government Gateway user ID and password.
- Back in Sage, enter your National Insurance number.
- Confirm your business details, and your ownership share if it’s a property.
The connection lasts 18 months, and then you reconnect. Our guide on how to sign up for MTD covers step 1.
What to check before you choose Sage
- Whether your plan can send the end-of-year tax return yet.
- The limits on the free plan: 5 invoices a month and 25 auto-categorised transactions.
- That you aren’t VAT registered, because both Sole Trader plans are for non-VAT businesses.
- Overseas property, and rent plus self-employment together, if either applies.
To see how Sage compares, read our free MTD software comparison or try the MTD software picker.
Sources: Sage’s Sole Trader MTD page, landlords page, help centre and community forum. Checked 5 October 2026. MTD HQ is independent and not connected to Sage. This page has no affiliate links and is general information, not tax advice.