Most sole traders who aren’t VAT registered can use Making Tax Digital for free. Paid software starts at about £7 a month. We compared 14 options on 5 October 2026, and the best fit depends on your situation:
- You want free software with a bank feed: Zoho Books Free. It sends quarterly updates and the final tax return.
- You bank with Monzo Business or Tide: use the MTD tool built into your account. Both are free and send quarterly updates and the tax return.
- You bank with NatWest, Royal Bank of Scotland, Ulster Bank or Mettle: FreeAgent is free while you keep the business account.
- You’re VAT registered: Zoho Books Free, Pandle Free and FreeAgent all support VAT-registered businesses.
- You send a lot of invoices: Sage Sole Trader at £7 a month, Coconut at £12.99 and FreeAgent at £19 have no invoice limit.
- You keep a spreadsheet: My Tax Digital has a free bridging mode. Coconut’s bridging plan is £49.99 a year.
- You also have rental income: look at Coconut or My Tax Digital, which handle both in one account. QuickBooks and FreeAgent need a separate account for each income source.
- Want to pay nothing? See every free MTD software option compared
Software is only one reason to choose a bank account. Don’t switch banks for free software without comparing the accounts themselves. We don’t earn anything from links to banks.
Find your match
Answer a few quick questions and the picker shows up to three options that fit, with what to check before you sign up.
What income do you have?
How many rental properties?
Are you VAT registered?
How do you want to keep your records?
Do you have a business account with any of these?
How many invoices do you send a month?
What is your budget?
A guide based on your answers, using facts from each provider’s website on 5 October 2026. Plans and prices change, so check the provider’s site before you sign up. A bank’s tool is only suggested if you say you already have that account. We don’t earn commission from these links.
MTD software for sole traders compared
| Software | Price | VAT-registered users | Invoice limit | Quarterly updates | Tax return |
|---|---|---|---|---|---|
| Zoho Books Free | Free | Yes, says Zoho | 1,000 a year | Yes | Yes |
| Sage Sole Trader Free | Free | No | 5 a month | Yes | Not confirmed |
| Pandle Free | Free | Yes | None stated | Yes | Not confirmed |
| Clear Books Free | Free | Not confirmed | No invoicing | Yes | Check you can send it |
| My Tax Digital | Free | Yes | Not stated | Yes | Yes |
| Monzo Business | Free with a Monzo Business account | Not confirmed | Not stated | Yes | Yes |
| Tide | Free with a Tide business account | VAT filing needs a paid add-on | 3 a month on the free account | Yes | Yes |
| Starling | Free with a Starling sole trader account | VAT returns need a paid add-on | Not stated | Yes | Listed as “coming soon” |
| ANNA | Free for the 2026/27 tax year with an ANNA account | Not confirmed | Not stated | Yes | Yes |
| Xero Simple | £7 a month plus VAT | No | 10 a month | Yes, says Xero | Yes, says Xero |
| Sage Sole Trader | £7 a month plus VAT | No | Unlimited | Yes | Not confirmed |
| QuickBooks Sole Trader Plus | From £10 a month plus VAT | No | None stated | Yes | Yes, says QuickBooks |
| Coconut | £12.99 a month | Not confirmed | Unlimited | Yes | Yes |
| FreeAgent | £19 a month plus VAT, or free with a qualifying bank account | Yes | None stated | Yes | Yes |
Prices for Xero, Sage and QuickBooks are the standard price after an introductory discount. Every entry comes from the provider’s own website, checked on 5 October 2026.
What to check before you choose
- The tax return, not just quarterly updates. You need software that sends both. Several providers say the end-of-year tax return is “coming soon”, and for others we couldn’t confirm it.
- VAT. The cheapest plans from Sage, Xero and QuickBooks are only for businesses that aren’t VAT registered.
- Invoice limits. Free and low-cost plans often cap invoices at 3, 5 or 10 a month.
- The real price. Many paid plans show a discount for the first six months. The table shows the price after that.
- Rental income. If you have rent as well as self-employment, check the software handles both in one account.
What we left out
GoSimpleTax doesn’t offer Making Tax Digital filing itself and points its customers to Coconut. We couldn’t find confirmation that Countingup files quarterly updates for Income Tax, so it isn’t in the table.
How we checked
We read each provider’s own pricing and MTD pages on 5 October 2026. Where a provider’s pages disagreed or didn’t say, the table says “not confirmed”. MTD HQ is independent. No provider paid to be listed and this page has no affiliate links. Before you choose, check the product appears in HMRC’s software finder.
Looking for free options only? See our free MTD software comparison. Not sure if you need MTD yet? Use our MTD threshold checker, or see your dates with the MTD deadline finder.