Compare software for UK sole traders and landlords preparing for Making Tax Digital for Income Tax in 2026, including accounting software, landlord-friendly tools and spreadsheet bridging options.
From 6 April 2026, many UK sole traders and landlords with qualifying income over £50,000 must use software that works with Making Tax Digital for Income Tax. HMRC says MTD software must be able to create digital records, send quarterly updates, and submit the tax return.
This guide compares common MTD software options for UK users, including full accounting software, landlord-friendly tools, and spreadsheet bridging software.
| User type | Best-fit software type | Strong options to compare |
|---|---|---|
| Sole traders wanting full bookkeeping | Cloud accounting software | QuickBooks, Xero, FreeAgent, Sage |
| Freelancers and contractors | UK-focused accounting software | FreeAgent, QuickBooks, Xero |
| Landlords | Property-aware MTD software or accounting software | Xero, QuickBooks, FreeAgent, Sage, landlord-specific tools |
| Spreadsheet users | Bridging software | TaxCalc, BTCSoftware, GoFile-style bridging tools |
| Users wanting low-cost/free options | Free or freemium MTD tools | FreeAgent via bank offers, Sage/free MTD products, Clear Books-style options |
| Accountant-managed users | Agent-compatible software | TaxCalc, BTCSoftware, Xero, Sage, QuickBooks |
HMRC says users may use software that creates digital records or software that connects to existing records, such as spreadsheets; if more than one product is used, the products must work together to meet MTD requirements.
FreeAgent is a strong first shortlist choice for UK freelancers, contractors and small sole traders because it is UK-tax focused and already fits your existing “sole trader accounting UK” content cluster.
Best for: freelancers, contractors, sole traders
Watch out for: may be less suitable for larger or more complex businesses
StackValuer verdict: best “simple UK tax workflow” candidate.
QuickBooks is a strong all-rounder for sole traders and small businesses that want bookkeeping, invoicing, expense tracking and reporting in one system.
Best for: sole traders, small businesses, accountants
Watch out for: add-ons and plan choice can become confusing
StackValuer verdict: best broad-market option to compare against Xero.
Xero is a strong option for businesses that want bank feeds, automation and a large integration ecosystem.
Best for: growing sole traders, SMEs, users with multiple apps
Watch out for: payroll and some features may depend on plan/add-ons
StackValuer verdict: best for users who care about integrations and scalability.
Sage is a strong UK-focused accounting brand and a good option for users who want an established provider with compliance-oriented positioning.
Best for: UK SMEs, accountant-led businesses, Sage users
Watch out for: interface may feel less modern than some competitors
StackValuer verdict: best traditional UK accounting brand.
Zoho Books is useful for small businesses already using Zoho apps or wanting lower-cost accounting with automation.
Best for: startups, small businesses, Zoho users
Watch out for: UK accountant adoption may be lower than QuickBooks/Xero/Sage
StackValuer verdict: best value-led alternative.
Bridging software is relevant where a user already keeps spreadsheet records and needs to connect those records to HMRC-compatible submission software.
Best for: spreadsheet users, accountants, agent-managed clients
Watch out for: higher manual error risk than full accounting software
StackValuer verdict: best fallback route, not the cleanest option for beginners.
For Making Tax Digital for Income Tax, software needs to support three core jobs:
Quarterly updates are not full tax returns. HMRC says compatible software uses digital records to create totals for income and expense categories every three months.
Spreadsheets alone are not enough. They may be part of a compliant workflow only if connected to compatible bridging software.
Use this rule:
| Record method | Suitable for MTD? | Notes |
|---|---|---|
| Paper records only | No | Not sufficient for full-year digital record keeping. |
| Spreadsheet only | No | Needs compatible bridging software. |
| Spreadsheet + bridging software | Potentially yes | Must connect digitally to HMRC workflow. |
| Full accounting software | Usually best route | Best for automation, bank feeds and fewer manual steps. |
| Accountant-managed software | Often suitable | Confirm your accountant can support your chosen product. |
This aligns with the MTD content direction you already set: paper records, spreadsheets without bridging, and manual bookkeeping apps without HMRC integration should not be treated as sufficient.
| Software | Best for | Digital records | Quarterly updates | Tax return support | Positioning |
|---|---|---|---|---|---|
| FreeAgent | Sole traders/freelancers | Yes | Check provider/HMRC finder | Check provider/HMRC finder | UK tax-focused |
| QuickBooks | General small business | Yes | Check provider/HMRC finder | Check provider/HMRC finder | Broad all-rounder |
| Xero | Growing businesses | Yes | Check provider/HMRC finder | Check provider/HMRC finder | Integrations/scalability |
| Sage | UK SMEs | Yes | Check provider/HMRC finder | Check provider/HMRC finder | Established UK provider |
| Zoho Books | Budget/software-suite users | Yes | Check provider/HMRC finder | Check provider/HMRC finder | Value alternative |
| TaxCalc | Accountants/spreadsheet users | Connects existing records | Check provider/HMRC finder | Check provider/HMRC finder | Bridging/tax workflow |
| BTCSoftware | Accountants | Connects existing records | Check provider/HMRC finder | Check provider/HMRC finder | Agent-led workflow |
Choose FreeAgent if you are a freelancer, contractor or simple sole trader and want a UK-tax-focused workflow.
Choose QuickBooks if you want a mainstream all-rounder with invoicing, expenses, reporting and broad small-business support.
Choose Xero if you want strong integrations, bank feeds and a scalable accounting ecosystem.
Choose Sage if you prefer an established UK accounting brand with compliance-oriented positioning.
Choose Zoho Books if price and business-suite integration matter more than UK accountant familiarity.
Choose bridging software if you are committed to spreadsheets or your accountant manages your MTD process.
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For many sole traders, the first shortlist should include FreeAgent, QuickBooks, Xero and Sage. The right choice depends on whether you want simplicity, accountant support, integrations, bank feeds, or the lowest monthly cost.
Landlords should check whether the software supports property income records, expenses, quarterly updates and any other income they need to report. HMRC says users need software that supports the income sources covered by Making Tax Digital for Income Tax.
Excel or spreadsheets may be used only if connected to compatible software that can meet MTD requirements. A spreadsheet on its own is not enough.
No. HMRC says software listed through its finder has been through HMRC’s recognition process, but HMRC does not recommend any product or provider.
HMRC says you are required to use MTD for Income Tax from 6 April 2026 if your total annual income from self-employment and property is over £50,000.
Best overall shortlist: FreeAgent, QuickBooks, Xero, Sage.
Best fallback route: bridging software for spreadsheet users.
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