Best MTD Compatible Software (2026): Top 10 Compared

Xero is a cloud accounting platform that HMRC lists as recognised software for MTD for VAT. Its UK pricing page states that each plan is "MTD for Income Tax ready" and includes submitting VAT returns to HMRC, so a VAT-registered sole trader can meet both regimes in one ledger.

Four plans are sold in the UK. Ignite covers essentials with limits of 20 invoices and 10 bills. Grow removes those limits and adds a 60-day cash flow forecast and payroll for one person. Comprehensive adds multiple currencies, a 90-day forecast and payroll for five people. Ultimate adds project time tracking, KPI analysis, industry benchmarking and payroll for ten people. Every plan includes smart document capture, real-time reports and CIS calculations. Hubdoc is included while it is connected to the subscription.

Xero states that it has more than 5 million customers and works with 250,000 accountants and bookkeepers. An optional company accounts and tax add-on costs £120 a year.

Sage Accounting is Sage's cloud accounting product for small businesses. HMRC's VAT finder lists it as Sage Business Cloud Accounting: Start/Standard/Plus, separate from the Sage 50, Sage 200 and Sage Intacct entries.

All three plans now include Sage Payroll and Sage Copilot, an assistant that drafts payment reminders, tracks VAT tasks and checks data for common mistakes before a VAT return is filed. Start is aimed at VAT-registered sole traders and new businesses, Standard at businesses with suppliers, CIS or accrual accounting, and Plus at businesses managing inventory or multiple currencies.

For sole traders who are not VAT registered, Sage offers Sage Sole Trader free. Sage describes it as tax and accounting software for Self Assessment and MTD for Income Tax, with bank statement import, automatic categorisation, invoicing and in-product support. Sage states that more than 100,000 UK sole traders use it. The page reviewed did not describe VAT filing in Sage Sole Trader.

FreeAgent is a UK cloud accounting product built for freelancers, sole traders, landlords, partnerships and small limited companies. HMRC lists it as recognised MTD for VAT software, and its pricing page describes an end-to-end MTD for Income Tax service that submits quarterly updates and files the final declaration directly to HMRC.

Pricing follows the legal form of the business rather than feature tiers. Each plan includes invoicing and estimates, expense tracking, project tracking, a dashboard, a mobile app and Radar trend insights. A Tax Timeline shows upcoming tax liabilities and deadlines in real time, and the product generates MTD-compatible VAT returns and Self Assessment returns. Limited companies also get Final Accounts and Corporation Tax filing.

The free route through NatWest, Royal Bank of Scotland, Ulster Bank and Mettle accounts makes FreeAgent a no-cost MTD option for many sole traders. Optional add-ons include unlimited Smart Capture and an Amazon UK Marketplace connection at £6 a month.

Zoho Books is the accounting application in Zoho's business software suite, with a UK edition that HMRC lists as recognised MTD for VAT software. The UK pricing page states that its free plan is "MTD for Income Tax ready": sole traders and landlords can send quarterly updates, report adjustments and other income sources, and submit the final tax return.

The same free plan files the SA100 Self Assessment return with the employment, short self-employment and UK property pages, pre-filled for sole traders and landlords. It also tracks and files MTD VAT returns, tracks CIS contractors and includes invoicing, quotes, receipt autoscans, mileage tracking and more than 50 reports.

Paid plans add users and features. Standard adds multiple bank feeds, CT600 and final accounts filing, custom reports and API access. Professional adds bills, CIS return submission, purchase orders, multi-currency and inventory. Premium adds fixed assets, budgets and cash flow forecasting. Elite adds warehouse and batch tracking.

Pandle is UK online bookkeeping software aimed at sole traders, freelancers, small businesses and their accountants. HMRC lists it as recognised MTD for VAT software, and its pricing grid shows MTD IT submissions and VAT return submissions on both the free and paid plans.

Pandle Free includes quotes and invoices, multiple currencies, Stripe feeds, bank rules, business reports, tax estimates and reminders, payment reminders, recurring transactions, transaction locking, EU VAT and EC Sales lists, customer statements and bank imports. Users can import data and export it at any time.

Pandle Pro adds bank feeds, receipt uploads, projects, cash flow forecasting, user permissions, unlimited users, a mileage tracker, PayPal feeds, stock control, multi-company management and live chat support, which Pandle says is provided by bookkeepers. At £5 a month it is among the lowest paid prices on this page. Accountants can manage clients through a separate partner programme.

Clear Books is a UK cloud accounting provider that HMRC lists as recognised MTD for VAT software. Its pricing page describes its free sole trader and landlord plans as HMRC-recognised for MTD Income Tax quarterly updates.

Plans are grouped by user type. Sole Trader Free records income and expenses, sends quarterly updates and works for CIS subcontractors. Paid sole trader plans add receipt scanning, bank feeds, invoicing, balance sheet reporting and unlimited users, and Sole Trader Plus adds MTD VAT, flat-rate VAT and domestic reverse charge. Property and Foreign Property plans follow the same pattern for one property free and multiple properties paid.

For limited companies, partnerships and charities, Small covers bank feed matching, invoicing, reporting, integrations, journals and a dividends tool. Medium adds MTD VAT submissions, purchase orders and CIS returns. Large adds project accounting, multi-currency, expense claims and fixed assets. Payroll with RTI submissions is an optional bolt-on.

IRIS KashFlow is a UK online accounting product owned by IRIS Software Group, which sells several other HMRC-recognised products including IRIS Elements and IRIS VAT Filer. HMRC lists KashFlow as recognised MTD for VAT software.

Two plans are offered. Starter is for sole traders, contractors and small businesses, with unlimited quotes, 10 invoices, 25 reconciled bank transactions and a single user. Business is for growing businesses and limited companies, with unlimited invoices and reconciliation and multiple users. Both include VAT management and online submission, bank feeds, KashFlow Payments, a mobile app, more than 50 reports, a customisable dashboard, purchase and expense management, mileage tracking, receipt capture, multi-currency and payroll for up to five employees.

The pricing and product pages reviewed describe MTD for VAT submission but do not state MTD for Income Tax support. Sole traders and landlords facing quarterly Income Tax updates should confirm that coverage with IRIS before choosing it.

QuickFile is a UK online accounting system that prices by account size, measured in ledger entries, rather than by feature tier. HMRC's VAT finder lists two QuickFile products: QuickFile itself for record keeping and QuickFile Bridging Software for submitting from other records.

Every account size includes invoicing, a branded client area, purchase and receipt management, banking automation, MTD-compatible VAT returns, estimates, multi-currency and reporting, with free unlimited users, two-factor authentication, 1 GB of storage, automated backups and API access. QuickFile states more than 400 integrations.

Power User features include segmented profit and loss, custom trading styles, invoice revision history, cryptocurrency tracking, MTD VAT bridging and MTD ITSA readiness. Large and extra-large accounts get these with the £60 annual fee; smaller free accounts must buy a Power User subscription. Accountants and bookkeepers can host clients on QuickFile Affinity, a separately priced multi-client portal.

VT Software is a UK developer of downloadable bookkeeping and accounts production software, listed by HMRC as VT Software Limited among recognised MTD for VAT products. Its MTD page states that VAT returns can be submitted from VT Transaction+ or VT Cashbook, or from a spreadsheet using the VT Report bridging tool, for any number of businesses with no limit on submissions.

The pricing page extends that to Income Tax: VT Transaction+ and VT Report submit both VAT returns and Income Tax quarterly updates, and VT Accounts Suite adds submission through an agent services account. Transaction+ also covers customer and supplier ledgers, foreign currency bank accounts, bank statement imports, reconciliation, departmental analysis and standard, cash accounting and reverse charge VAT.

The model suits practices and bookkeepers who prefer software installed on their own machines. Each licence is for one named person, so firms with several staff pay per user.

TaxCalc, developed by Acorah Software Products, is best known for tax return and accounts production software used by UK accountancy practices. HMRC lists Acorah Software Products Ltd (TaxCalc) among recognised MTD for VAT products, and TaxCalc describes MTD Quarterly Filer as an HMRC-recognised spreadsheet bridging solution for MTD for Income Tax.

The business edition lets sole traders and landlords keep their spreadsheets. An on-screen cell selector imports figures into each quarterly update. The software retrieves MTD obligations from HMRC to create the standard quarterly periods, accepts add-backs, disallowables and private-use adjustments, and fetches an HMRC tax estimate after each submission. Several sole trade and property businesses can be managed together.

Users who also need the annual return can add TaxCalc for Individuals, and VAT-registered users can add VAT Filer for Business. Accountancy practices use the separate MTD Quarterly Filer practice edition to file for clients.