Best MTD-Compatible Software for UK Freelancers 2026 (Honest Comparison)

There are dozens of MTD-compatible software options out there. Most reviews are sponsored. This one isn't — just honest numbers from a team that's helped thousands of UK freelancers navigate tax.

Quick verdict

FreeAgent — Best overall for UK freelancers

FreeAgent was built for UK sole traders and contractors. It handles MTD submissions natively, connects to most UK banks via Open Banking, and generates invoices, estimates, and self-assessment calculations in one place.

Price: £19/month (NatWest/RBS customers get it free; others can get discounts via accountants).

MTD features: Quarterly submissions built in. Dashboard shows running tax estimate throughout the year.

Downsides: Limited project management. Can feel rigid if your business is unusual.

QuickBooks — Good for slightly bigger operations

QuickBooks' Simple Start (£12/month) covers basic MTD needs. The higher tiers add time tracking, inventory management, and multi-currency — useful if you work internationally.

MTD features: Quarterly submissions in all plans. Good accountant collaboration tools.

Downsides: Less UK-specific than FreeAgent. UI can be cluttered at lower tiers.

Xero — For when you're growing past solo

Xero's Starter plan (£15/month) supports MTD but limits you to 20 invoices per month. Seriously. The Grow plan (£42/month) removes that limit but that's steep for a sole trader.

MTD features: Full quarterly submissions. Excellent bank reconciliation.

Downsides: The Starter plan's invoice limit is frustrating. Better value at Grow tier, which most freelancers don't need.

HMRC's free tool — Minimum viable compliance

HMRC has a free web-based tool for MTD submissions. It works. It's basic. You get no invoicing, no bank feeds, no self-assessment calculation — just the ability to submit your quarterly figures.

If you already have separate invoicing software and just need MTD submission capability, this covers it. But most freelancers will want more.

Spreadsheet + bridging software — For the spreadsheet faithful

You can't submit directly from Excel/Google Sheets to HMRC. But bridging software (like 123 Sheets, BTC Software, or Absolute) acts as a connector — you keep your spreadsheet, the bridging tool submits it quarterly.

Price: £5-15/month depending on provider.

Best for: People who've tracked their finances in spreadsheets for years and don't want to change now.

Downside: More manual. More room for error. If your spreadsheet formula breaks, your submission breaks.

What does "MTD-compatible" actually mean?

Software is MTD-compatible if it can:

• Store your income and expense records digitally
• Link to HMRC's API to submit quarterly updates
• Receive information back from HMRC (tax calculations, etc.)

HMRC's full approved list is at gov.uk. Always check your chosen software is on the list before signing up.

How to choose

If you're a straightforward UK sole trader with one income stream: FreeAgent (or HMRC's free tool if cost matters).

If you work internationally or have complex invoicing: QuickBooks or Xero.

If you've been using spreadsheets for years: bridging software.

The most important thing: don't leave it until April 5th. You need to sign up through HMRC's sign-up service as well as setting up the software. Allow at least a week.

Free MTD tools

• MTD Readiness Checker — 2-minute quiz
• MTD Cost Calculator — What will this cost you?
• MTD Penalty Calculator — What if you miss a deadline?
• MTD Countdown Checklist — Track your progress

Frequently asked questions