Best MTD Software 2026: 10 Options Compared for Sole Traders

Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is no longer optional for most sole traders. If your gross income exceeds the threshold, you need compatible software to submit quarterly updates and end-of-period statements to HMRC. But with dozens of options on the market, choosing the right one is genuinely confusing.

We have compared ten of the most popular MTD-compatible platforms for sole traders across five categories: price, ease of use, MTD compliance, features, and accountant support. We have tried to be fair. Every product on this list has genuine strengths.

How We Scored

Each platform is scored out of 5 in five categories. The overall score is a simple average. We have focused on what actually matters for sole traders rather than features aimed at larger businesses.

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1. Accounted

Price: From £14/month (Starter) to £44/month (Complete) Ease of use: 5/5 | MTD compliance: 5/5 | Features: 5/5 | Accountant support: 5/5 | Price value: 4/5

Accounted is a UK-native platform built specifically for sole traders, landlords, and small businesses. Its AI bookkeeper, Penny, handles transaction categorisation, receipt scanning via WhatsApp, and tax calculations automatically. It supports MTD for both VAT and Income Tax, with 11 of the 13 Self Assessment schedules covered. The free accountant portal includes practice management tools and an exception-first workflow that saves accountants significant time. The confidence scoring on AI categorisations means you always know when something needs a human eye.

Where it excels: All-in-one platform that combines bookkeeping, tax filing, and practice tools. WhatsApp receipt scanning is genuinely unique. Where it falls short: Newer to market than some competitors, so fewer third-party integrations than Xero.

2. Xero

Price: From £15/month (Starter) to £47/month (Premium) Ease of use: 4/5 | MTD compliance: 4/5 | Features: 5/5 | Accountant support: 4/5 | Price value: 3/5

Xero is the most widely used cloud accounting platform in the UK. Its app marketplace is enormous, with over 1,000 integrations covering everything from inventory to project management. The interface is polished and accountants know it well.

Where it excels: App marketplace, brand recognition, multi-currency support. Where it falls short: MTD ITSA support has been slow to develop. Pricing can escalate quickly once you add apps. Transaction categorisation is largely manual.

3. QuickBooks

Price: From £12/month (Simple Start) to £32/month (Advanced) Ease of use: 4/5 | MTD compliance: 4/5 | Features: 4/5 | Accountant support: 4/5 | Price value: 4/5

QuickBooks is strong on inventory management and project tracking, making it a solid choice for sole traders who sell physical products. The mobile app is well-designed and receipt capture works reliably.

Where it excels: Inventory management, project profitability tracking, competitive pricing. Where it falls short: The UK version sometimes feels like a localised American product. Self Assessment support is limited compared to UK-native tools.

4. FreeAgent

Price: From £14.50/month (sole trader plan) Ease of use: 5/5 | MTD compliance: 4/5 | Features: 4/5 | Accountant support: 3/5 | Price value: 4/5

FreeAgent is genuinely pleasant to use. It was built for freelancers and sole traders, and it shows. Tax timeline features and plain-English explanations make tax less intimidating. Free with certain NatWest, Royal Bank, and Ulster Bank accounts.

Where it excels: User experience, tax timeline, free with NatWest banking. Where it falls short: Practice management tools are basic. Limited property income support for landlords.

5. Sage Accounting

Price: From £14/month (Start) to £33/month (Plus) Ease of use: 3/5 | MTD compliance: 4/5 | Features: 4/5 | Accountant support: 3/5 | Price value: 3/5

Sage has deep roots in UK accounting. The cloud version is capable but can feel cluttered compared to newer platforms. Good for sole traders who want a traditional accounting feel.

Where it excels: Payroll integration, established UK presence, strong reporting. Where it falls short: Interface feels dated. MTD ITSA features are still maturing.

6. ANNA Money

Price: Business account with built-in bookkeeping, various plans Ease of use: 4/5 | MTD compliance: 3/5 | Features: 3/5 | Accountant support: 2/5 | Price value: 4/5

ANNA combines a business bank account with basic bookkeeping and tax filing. The integration between banking and accounting is seamless because it is the same product.

Where it excels: Banking and bookkeeping in one place, auto-categorisation of transactions. Where it falls short: Limited accountant collaboration tools. Feature set is basic compared to dedicated accounting software.

7. Coconut

Price: Free plan available, Pro from £7.50/month Ease of use: 4/5 | MTD compliance: 3/5 | Features: 3/5 | Accountant support: 2/5 | Price value: 5/5

Coconut is a lightweight option aimed at freelancers. The free tier is genuinely useful for very simple businesses. Tax estimates and categorisation work well for straightforward income streams.

Where it excels: Price, simplicity, tax estimates for freelancers. Where it falls short: Limited MTD ITSA support. Not suitable for more complex businesses or landlords.

8. GoSimpleTax

Price: From £58.50/year for Self Assessment filing Ease of use: 4/5 | MTD compliance: 4/5 | Features: 2/5 | Accountant support: 2/5 | Price value: 4/5

GoSimpleTax does one thing well: Self Assessment filing. The guided process walks you through your tax return step by step. Good for people who keep their own records and just need a filing tool.

Where it excels: Guided SA filing, affordable annual pricing, straightforward process. Where it falls short: No bookkeeping features. You still need to keep records elsewhere.

9. Hammock

Price: From £8/month Ease of use: 4/5 | MTD compliance: 3/5 | Features: 3/5 | Accountant support: 2/5 | Price value: 4/5

Hammock is designed specifically for landlords, with property-specific features that most general accounting tools lack. If you only have rental income, it is worth considering.

Where it excels: Landlord-specific features, property income tracking, Section 24 calculations. Where it falls short: Not suitable if you have non-property income. Limited accountant tools.

10. Ember

Price: From £39/month (includes bookkeeping service) Ease of use: 4/5 | MTD compliance: 3/5 | Features: 3/5 | Accountant support: 3/5 | Price value: 3/5

Ember offers automated bookkeeping with a human review layer. It sits somewhere between software and a bookkeeping service. Useful if you want someone else to handle the detail.

Where it excels: Managed bookkeeping approach, real-time tax estimates. Where it falls short: Higher price point. Less control over your own books.

Summary Table

| Software | Price | Ease of Use | MTD | Features | Accountant Support | Overall | |---|---|---|---|---|---|---| | Accounted | 4 | 5 | 5 | 5 | 5 | 4.8 | | Xero | 3 | 4 | 4 | 5 | 4 | 4.0 | | QuickBooks | 4 | 4 | 4 | 4 | 4 | 4.0 | | FreeAgent | 4 | 5 | 4 | 4 | 3 | 4.0 | | Sage | 3 | 3 | 4 | 4 | 3 | 3.4 | | ANNA | 4 | 4 | 3 | 3 | 2 | 3.2 | | Coconut | 5 | 4 | 3 | 3 | 2 | 3.4 | | GoSimpleTax | 4 | 4 | 4 | 2 | 2 | 3.2 | | Hammock | 4 | 4 | 3 | 3 | 2 | 3.2 | | Ember | 3 | 4 | 3 | 3 | 3 | 3.2 |

Our Recommendation

There is no single best choice for everyone. If you sell physical products, QuickBooks' inventory management is hard to beat. If you bank with NatWest, FreeAgent being free is compelling. If you only have rental income, Hammock's specialist approach deserves a look.

But for most sole traders who want MTD-compliant bookkeeping that actually reduces their workload, Accounted offers the strongest combination of AI automation, tax coverage, and accountant collaboration. The WhatsApp receipt scanning alone saves hours every month, and the confidence scoring means you can trust the AI without blindly accepting every categorisation.

Try It Yourself

Accounted offers a free trial so you can see how Penny handles your transactions before committing. No card required, no pressure. If you already have an accountant, they can join through the free accountant portal and manage your books using the exception-first workflow. Start your free trial at accounted.io and see the difference AI bookkeeping makes.

Related Reading

• Best Accounting Software for Accountancy Practices in 2026
• Accounted vs QuickBooks: Which is Better for UK Sole Traders?

Start your free trial and see how Accounted simplifies your bookkeeping.