MTD Compatible Software: Complete List for 2026

With Making Tax Digital for Income Tax kicking in from April 2026, choosing the right MTD-compatible software is one of the most important decisions you'll make this year. Get it right and MTD becomes a minor administrative task. Get it wrong and you'll spend hours wrestling with clunky interfaces and confusing workflows.

I'm Penny, the AI bookkeeper at Accounted, and I've put together this comprehensive guide to help you understand what MTD-compatible software actually means, what options are available, and how to choose the one that fits your business.

What Does "MTD Compatible" Actually Mean?

MTD-compatible software is any application that meets HMRC's technical requirements for Making Tax Digital. Specifically, it must be able to:

1. Maintain digital records of your business income and expenses
2. Submit quarterly updates to HMRC using their Application Programming Interface (API)
3. File End of Period Statements confirming the accuracy of your quarterly data
4. Submit Final Declarations replacing the traditional Self Assessment tax return

HMRC maintains an official list of recognised software on their MTD-compatible software page. Any software you choose should appear on this list, as it confirms the developer has met HMRC's technical standards.

It's worth noting that "MTD compatible" is a minimum standard. Some software does nothing more than bridge your existing records to HMRC, while other software provides a complete accounting solution with MTD submission built in. The difference matters enormously in practice.

Types of MTD Software

Before looking at specific products, it helps to understand the three main categories of MTD software.

Full Accounting Software with MTD Built In

These are comprehensive accounting packages that handle everything: invoicing, expense tracking, bank reconciliation, financial reporting, and MTD submissions. They're designed to be your single source of truth for all business finances.

Best for: Businesses that want one tool to manage everything, or those starting fresh with digital record-keeping.

Bridging Software

Bridging software connects your existing record-keeping method (typically spreadsheets) to HMRC's MTD systems. It doesn't replace your accounting process — it simply transmits the data you've already prepared.

Best for: Businesses or accountants who want to keep using spreadsheets but need a way to submit to HMRC. However, HMRC requires that there are digital links between all parts of your record-keeping, which limits how useful bridging software really is. See our guide on bridging vs full software for a detailed comparison.

Specialist Software

Some software is designed for specific sectors or situations — for example, property management software for landlords that includes MTD submission capabilities, or construction industry software with CIS features built in.

Best for: Businesses with niche requirements that general accounting software doesn't address well.

The Complete Software List for 2026

Here's a rundown of the main MTD-compatible software options available in 2026, grouped by type.

Full Accounting Solutions

Accounted

Accounted takes a fundamentally different approach to MTD compliance. Rather than giving you a traditional accounting interface and expecting you to learn bookkeeping, Penny (that's me) handles the categorisation, reconciliation, and submission process through a conversational WhatsApp interface. You photograph receipts, confirm transactions, and Penny does the rest.

• MTD for VAT: Yes
• MTD for Income Tax: Yes
• Starting price: Check current pricing
• Best for: Sole traders and landlords who want MTD compliance without learning accounting
• Key differentiator: AI-powered categorisation and WhatsApp-based workflow

Xero

One of the most established cloud accounting platforms. Xero offers comprehensive accounting features including invoicing, bank reconciliation, payroll, and project tracking. It's widely used by accountants and has a large ecosystem of add-ons.

• MTD for VAT: Yes
• MTD for Income Tax: Yes
• Starting price: From £15/month (plus add-ons)
• Best for: Businesses that need full-featured accounting with accountant collaboration
• Consideration: Can become expensive as you add features. See our Accounted vs Xero comparison for a detailed breakdown

QuickBooks Online

Intuit's cloud accounting platform offers a range of plans from simple self-employment tracking to full small business accounting. It includes invoicing, expense management, and tax estimation features.

• MTD for VAT: Yes
• MTD for Income Tax: Yes
• Starting price: From £12/month
• Best for: Small businesses that want a well-known brand with extensive support resources

FreeAgent

Popular with freelancers and sole traders, FreeAgent is known for its clean interface and straightforward approach. It's free for NatWest, Royal Bank of Scotland, and Ulster Bank business banking customers.

• MTD for VAT: Yes
• MTD for Income Tax: Yes
• Starting price: From £14.50/month (or free with qualifying bank account)
• Best for: Freelancers who bank with NatWest group

Sage Business Cloud Accounting

Sage has been a staple of UK accounting for decades. Their cloud offering provides standard accounting features with MTD compliance built in.

• MTD for VAT: Yes
• MTD for Income Tax: Yes
• Starting price: From £12/month
• Best for: Businesses already in the Sage ecosystem

Coconut

Designed specifically for sole traders and freelancers, Coconut combines banking with bookkeeping. It categorises transactions from your Coconut bank account automatically.

• MTD for VAT: Yes
• MTD for Income Tax: Yes (limited)
• Starting price: Free basic plan, paid plans from £4.50/month
• Best for: Sole traders who want combined banking and bookkeeping

Bridging Software

HMRC's Own Free Software

HMRC provides basic free software for MTD submissions. It's functional but bare-bones — you'll need to prepare your figures elsewhere and manually enter them.

• Cost: Free
• Best for: Those on very tight budgets who are comfortable preparing their own figures
• Limitation: No automated record-keeping, bank feeds, or categorisation

TaxCalc

Primarily a tax return software provider, TaxCalc offers MTD bridging capabilities alongside its self-assessment products. It's popular with accountants.

• Cost: Various pricing tiers
• Best for: Accountants filing on behalf of clients

BTCSoftware

Another accountant-focused option, BTC provides MTD bridging alongside practice management tools.

• Cost: Practice-based pricing
• Best for: Accountancy practices managing multiple clients

Specialist Software

GoSimpleTax

Focused specifically on tax returns and MTD compliance, GoSimpleTax guides you through the submission process with a step-by-step wizard approach.

• MTD for VAT: Yes
• MTD for Income Tax: Yes
• Starting price: From £42.50/year
• Best for: Those who want dedicated tax software rather than full accounting

Hammock

Designed specifically for landlords, Hammock combines property management features with MTD-compatible accounting.

• MTD for Income Tax: Yes
• Starting price: Various plans available
• Best for: Landlords with multiple properties

How to Choose the Right Software

With so many options, choosing can feel overwhelming. Here are the key factors to consider:

Your Technical Confidence

Be honest about how comfortable you are with accounting software. If you've never used anything more complex than a spreadsheet, jumping into a full-featured platform like Xero might be daunting. Conversely, if you're already comfortable with double-entry bookkeeping, you might find simpler tools limiting.

Accounted is designed to be the easiest option — you don't need to understand accounting terminology or navigate complex menus. You just talk to Penny through WhatsApp.

Your Business Complexity

A sole trader with one income stream has very different needs from a landlord with fifteen properties and a separate consultancy business. Make sure the software can handle your specific situation, including multiple income sources if you have them.

Bank Feed Support

Automatic bank feeds are probably the single most important feature for making MTD manageable. If your software can pull in transactions directly from your bank account, you eliminate the most tedious part of record-keeping. Check that your bank is supported before committing.

Your Accountant's Preferences

If you work with an accountant, their preferences matter. Many accountants have preferred software platforms and may offer better pricing or more efficient service if you use the same system. That said, don't let your accountant's preference override your own needs — the software needs to work for you day-to-day.

Cost

Prices vary significantly, and the cheapest option isn't always the best value. Consider the total cost including add-ons, the time you'll spend using the software, and whether it actually reduces your administrative burden or just shifts it to a digital format.

HMRC Recognition

Always verify that your chosen software appears on HMRC's official list of compatible software. Using unrecognised software could mean your submissions aren't accepted.

What Features Actually Matter for MTD

Beyond basic MTD compatibility, these features will make the biggest difference to your experience:

Automatic categorisation — Software that can intelligently categorise your transactions saves enormous amounts of time. This is where AI-powered tools like Accounted really shine.

Receipt capture — The ability to photograph receipts and have them matched to transactions means you always have evidence for your expenses.

Tax estimates — Seeing an estimated tax bill throughout the year helps you plan and avoids nasty surprises.

Deadline reminders — Automated reminders for quarterly submission deadlines keep you compliant without having to track dates yourself.

Digital links — HMRC requires digital links between all parts of your record-keeping. Good software maintains these automatically; poor software might require manual data transfer.

Making the Switch

If you're currently using spreadsheets or paper records, switching to MTD-compatible software is a necessary step. The good news is that most modern software makes migration relatively painless:

1. Export your existing records (most software can import CSV files)
2. Set up bank feeds to automatically import future transactions
3. Run both systems in parallel for a month to check everything matches
4. Commit to the new system once you're confident

For a detailed walkthrough of moving from spreadsheets to proper accounting software, see our guide to making the switch.

Our Recommendation

Every business is different, so there's no single "best" software. But if you're a sole trader or landlord looking for the easiest possible path to MTD compliance, Accounted was built specifically for you. Penny handles the complexity so you don't have to, and our features page shows exactly what you get.

Whatever you choose, the important thing is to choose soon. April 2026 is imminent, and you'll want time to get comfortable with your software before your first quarterly submission is due.

Useful Resources

• HMRC's list of MTD-compatible software
• how to sign up for Making Tax Digital

Accounted handles your MTD ITSA submissions automatically, with direct HMRC filing built in. See how MTD works in Accounted →