Best Accounting Software for Making Tax Digital in the United Kingdom (2026)

If HMRC has written to say you must use Making Tax Digital for Income Tax, or your turnover is heading for the threshold, the question is no longer which bookkeeping app you like, but which product can send HMRC what it now asks for, four times a year plus a tax return. This guide covers who has to use MTD for Income Tax and when, what MTD software must do, how landlords fit in, and whether a spreadsheet with bridging software is enough. If you are a sole trader choosing your first accounting software, our guide to accounting software for sole traders weighs free plans, Self Assessment and growth; this page is only about meeting MTD.

How we chose. This page answers one question, whether a product can meet MTD, so we checked the MTD listing of each of the 10 accounting tools in our UK data before anything else, and took costs from the engine behind our accounting software comparison. Four things then decided the picks: whether our data lists the product for MTD for Income Tax and MTD for VAT, and on which plan; whether it also submits the tax return; how it gets transactions in without retyping; and how it fits a landlord, a subcontractor or someone who wants an accountant's help. The table above opens at 15 invoices a month, one user, no employees and not VAT registered; change any of them and it re-prices. We would make the same picks if no vendor paid us anything.

What software do you need for Making Tax Digital for Income Tax?

For Making Tax Digital for Income Tax, HMRC says your compatible software must do three things: create digital records of your income and expenses, send HMRC quarterly updates, and submit your tax return. One accounting product can do all three, or you can keep records in a spreadsheet and link it to bridging software that does the sending.

A digital record holds the amount, date and category of each transaction, according to HMRC's guidance on creating digital records. If a self-employment income source turns over less than £90,000, a sole trader only needs to mark each transaction as income or expense. Records for a quarter must exist before you send that quarter's update.

You also authorise the software so it can talk to HMRC, and reconnect it every 18 months. HMRC's finder asks which income you have and how you want to keep records, then lists products that fit; HMRC does not recommend any of them.

Who has to use MTD for Income Tax, and from when?

Sole traders and landlords registered for Self Assessment must use MTD for Income Tax once their qualifying income goes over the threshold for the year. Qualifying income is your self-employment and property income before expenses, so it is your turnover and rent, not your profit, and the test uses your return for an earlier tax year.

Source: GOV.UK, check if you're eligible for Making Tax Digital for Income Tax. HMRC writes to people it expects to be in scope, but if no letter arrives, checking is still your responsibility.

Salary, dividends, pensions and your share of partnership profit do not count towards qualifying income. Partnerships themselves are not yet in MTD for Income Tax; HMRC says it will set out their timeline later. Some people are exempt, including anyone with qualifying income of £20,000 or less, and you can apply if you are digitally excluded, for example because of age, disability or no realistic internet access. HMRC says being unfamiliar with software, or having few records, is not on its own a reason.

VAT is separate and already in force: HMRC says all VAT-registered businesses should now be signed up for Making Tax Digital for VAT and must keep VAT records and file VAT returns using compatible software. A VAT-registered sole trader over the Income Tax threshold is in both.

Which accounting software is listed for MTD for Income Tax and MTD for VAT?

Our data records each accounting provider's support for MTD for Income Tax and MTD for VAT separately, because a product can file one and not the other, and the plan MTD starts on differs between them. This table covers the providers whose MTD listings we have confirmed, with our wording intact; a plan name in brackets means MTD starts on that plan.

The full comparison shows every accounting provider we list, including any not in this table.

At Crunch, for example, MTD sits on a higher plan: its free plan and £4/mo (Lite) keep records, but MTD for Income Tax filing starts on Plus. FreshBooks files VAT returns under MTD for VAT but is recorded as No for MTD for Income Tax, so a FreshBooks user in scope would need a second product for Income Tax.

A Yes in our MTD for Income Tax column means the vendor supports it. It does not tell you which income types it covers or whether it submits the year-end tax return as well as quarterly updates, and HMRC's finder is the place to confirm both before you pay.

The MTD quarterly update calendar for sole traders and landlords

Under MTD for Income Tax, sole traders and landlords send HMRC an update after each quarter of the tax year, then a tax return after the year ends. Each quarterly update is a running total by category for the tax year so far, not a copy of every invoice or receipt, and a mistake is put right in a later update.

Standard periods follow the tax year and are the default. Calendar periods suit an accounting year that runs from 1 April to 31 March; you choose them in your software before your first update and cannot switch in the same tax year. Each self-employment and each property business has its own updates.

The tax return is then due by 31 January after the tax year ends, submitted through your MTD software, and it must include your other income too. HMRC's MTD penalties guidance says there are no penalties for missing a quarterly update deadline in the 2026 to 2027 tax year. From then on each missed deadline earns a point, and four points bring a £200 penalty.

MTD software for landlords with property income

Landlords are in MTD for Income Tax on the same thresholds as sole traders, and HMRC adds rent and self-employment turnover together to test them. A landlord with £25,000 of rent and a £30,000 trade is over £50,000, though neither income is on its own. For a jointly owned property, only your share of the income counts.

Property income brings three differences in what your software must do, from HMRC's guidance on digital records:

• Residential lettings need more detail. Even below £90,000 of property turnover, a landlord of UK residential property must mark which expenses are restricted finance costs, such as mortgage interest, not just income or expense.
• Joint lettings can leave expenses out of the quarterly updates, as long as they are added before the tax return, and you record only your share.
• Foreign property is a separate income source; it counts towards qualifying income if you were UK tax resident.

So before you choose, confirm the product supports UK property, and foreign property if you have it. Among our picks, QuickFile and FreeAgent both sell a landlord set-up. Our guide to accounting software for landlords goes further into running a lettings portfolio; this section covers only what MTD asks.

Bridging software or full accounting software for MTD?

HMRC describes bridging software as a tool that connects non-compatible software, such as spreadsheets, to HMRC systems. For MTD for Income Tax or VAT, a sole trader or landlord can keep records in a spreadsheet and send updates through bridging software, or move everything into accounting software that does both jobs.

The link between the two must be digital: linked cells, a CSV export and import, or an API all count, while retyping totals does not. Once a record has gone to HMRC in an update, you correct it where it lives and send it through the link again.

Bridging suits someone with a spreadsheet that already works, a handful of transactions a month and no wish to learn new software. Full accounting software earns its place when a bank feed would save typing, when you are also VAT registered, or when an accountant needs to see your books. We compare accounting software, not bridging tools, so for bridging products use HMRC's finder.

What to check before choosing MTD software

Before you pay for MTD software, sole traders and landlords should confirm five things, because a product can be HMRC-recognised and still not fit your situation. HMRC's finder or the vendor's own MTD page answers most of them.

1. Your income types. Self-employment, UK property and foreign property are separate sources; the product must cover each one you have.
2. The whole cycle. It should send quarterly updates and submit the tax return, so you are not buying a second product in January.
3. The plan MTD sits on. Where our table names a plan beside a Yes, the plan the cost table prices may not be the one that files.
4. VAT, if you are registered. One product for both MTD regimes means one set of records. You must register for VAT once taxable turnover goes over £90,000 in a rolling 12 months.
5. Your accountant. If someone else files for you, ask which software they use and whether they can act as your agent in it.

Matching MTD software to your income and records

• You bank with NatWest, RBS or Ulster Bank, or use Mettle: FreeAgent, which costs nothing with those accounts and files updates and the return direct.
• You would rather your bank account did the bookkeeping: ANNA Money, if you are happy to move your business banking.
• You let property and keep your own books: QuickFile, while you stay under its ledger-entry threshold.
• You are a CIS subcontractor: QuickBooks Online, which keeps CIS deductions and MTD figures together.
• You want to buy accountant help only when a quarter gets complicated: Crunch on its Plus plan.
• You already have a spreadsheet that works: bridging software from HMRC's finder may be all you need.

If none of these fits, the full accounting software comparison shows both MTD columns for every provider we list.