MTD Compatible Software Compared: Full Roundup 2026

Introduction

Making Tax Digital (MTD) is no longer something on the horizon. MTD for VAT has been mandatory since April 2022 for all VAT-registered businesses, and MTD for Income Tax Self Assessment (ITSA) is rolling out from April 2026. If you are self-employed or a landlord, you need MTD-compatible software.

This roundup compares the major MTD-compatible platforms available in the UK, covering features, pricing, and what each does well.

What MTD Actually Requires

Before comparing platforms, it helps to understand what MTD mandates. For VAT, you must keep digital records and submit VAT returns through MTD-compatible software. For Income Tax, you will need to submit quarterly updates of your income and expenses to HMRC and a final declaration at the year end.

The key word is "digital." You cannot simply type numbers into HMRC's website. Your records must be maintained in compatible software with a digital link to HMRC's systems.

Accounted

Accounted is fully MTD-compliant for both VAT and Income Tax. The platform connects directly to HMRC's APIs for submission, and all records are maintained digitally within the system.

What sets Accounted apart is that MTD compliance happens in the background. Penny, the AI bookkeeper, keeps your records up to date automatically through bank feed imports, WhatsApp-based receipt processing, and intelligent categorisation. When a quarterly update is due, your records are already current because Penny has been maintaining them all along.

Pricing starts at £14 per month. See the pricing page for details.

MTD strengths: automatic record keeping through AI, direct HMRC integration, proactive deadline reminders, quarterly updates prepared automatically.

Xero

Xero is one of the most widely used MTD-compatible platforms in the UK. It is HMRC-recognised for MTD for VAT and is preparing for MTD for Income Tax. Xero's large accountant network means your accountant very likely already knows the platform.

MTD strengths: proven VAT filing track record, extensive bank feeds, strong accountant adoption, comprehensive reporting.

Pricing starts at approximately £15 per month for the Starter plan.

QuickBooks

QuickBooks is HMRC-recognised for MTD for VAT and offers MTD filing through its platform. The Self-Employed plan at around £8 per month is the most affordable MTD-compliant option from a major provider.

MTD strengths: affordable entry point, simple interface, good mobile experience, Self-Employed plan designed for sole traders.

FreeAgent

FreeAgent is MTD-compliant for VAT and has been proactive about preparing for MTD for Income Tax. Its UK focus means it handles HMRC requirements naturally. Free through NatWest banking.

MTD strengths: strong UK focus, free through NatWest, clear tax timeline, Self Assessment preparation built in.

Sage Business Cloud

Sage is a longstanding name in UK accounting. Sage Business Cloud Accounting is MTD-compliant for VAT, and Sage is preparing its MTD for Income Tax solution. Pricing starts at around £12 per month.

MTD strengths: established UK brand, extensive feature set, strong payroll integration, trusted by accountants.

GoSimpleTax

GoSimpleTax focuses specifically on tax filing. It is MTD-compliant and walks you through Self Assessment preparation with clear guidance. Pricing is typically a one-off annual fee rather than monthly.

MTD strengths: focused on tax filing, clear step-by-step guidance, affordable annual pricing, handles complex tax situations well.

The limitation is that GoSimpleTax is primarily a filing tool, not a full bookkeeping platform. You need to maintain your records elsewhere and enter the figures at filing time.

TaxCalc

TaxCalc offers MTD-compatible filing alongside comprehensive tax calculation. It is popular with accountants and tax professionals. Pricing varies by product.

MTD strengths: detailed tax calculations, handles complex tax situations, popular with professionals, good HMRC integration.

Like GoSimpleTax, TaxCalc is more of a filing tool than a day-to-day bookkeeping platform.

Pandle

Pandle is a UK-based bookkeeping platform with MTD filing on its paid plans. The free plan does not include MTD, but the paid plans starting at around £5 per month do.

MTD strengths: affordable, UK-focused, simple interface, adequate for basic needs.

HMRC-Compatible Spreadsheets with Bridging Software

If you want to keep using spreadsheets, you can maintain digital records in a spreadsheet and use bridging software to submit to HMRC. Several free and paid bridging tools are available.

MTD strengths: familiar workflow if you already use spreadsheets, low or no cost.

The significant downside is that spreadsheets lack automation. Every transaction must be entered manually, and there is no bank feed integration, no receipt scanning, and no automated categorisation. This approach meets the letter of MTD requirements but misses the spirit of digital record keeping.

What to Look For

When choosing MTD-compatible software, consider whether it covers your specific MTD obligations (VAT, Income Tax, or both), how much manual effort is required to keep records current, whether it connects to your bank for automatic transaction imports, whether it handles quarterly reporting requirements, what happens when deadlines approach (does it remind you or leave it to you), and whether your accountant can access and work with the platform.

The Quarterly Reporting Challenge

MTD for Income Tax requires quarterly updates. This means your books need to be reasonably up to date every three months. For many sole traders, this is the real challenge. It is easy to let bookkeeping slide when you are busy, and then face a scramble before each quarterly deadline.

Platforms with automated record keeping have a significant advantage here. If your software is importing bank transactions, categorising them, and processing receipts automatically, your quarterly updates largely prepare themselves.

Our Recommendation

For sole traders who want MTD compliance with minimal effort, Accounted's AI-powered approach means your records stay current automatically. You do not need to set aside time for bookkeeping catch-up before each quarterly deadline.

For those who want a proven platform with extensive accountant support, Xero is the safe choice.

For those on a tight budget, QuickBooks Self-Employed offers MTD compliance at the lowest price from a major provider.

For those who bank with NatWest and want comprehensive features at no cost, FreeAgent is the obvious choice.

Sign up for Accounted and make MTD compliance something that happens automatically.