You do not need to pay for MTD-compliant software. There are five genuinely free options available to UK sole traders, ranging from HMRC’s own basic tool to full-featured accounting packages that cost nothing if you qualify. Here is our ranking.
Quick comparison
| Software | Free if… | Best for |
|---|---|---|
| HMRC’s free tool | Everyone | Very simple affairs |
| Sage Sole Trader | NatWest/RBS/Mettle/Ulster | Non-VAT sole traders |
| Zoho Books | Under £50k turnover | Full features on free tier |
| FreeAgent | NatWest/RBS/Mettle/Ulster | Freelancers |
| QuickFile | Under 1,000 transactions | Multi-currency on free tier |
HMRC’s own free tool
HMRC provides its own basic MTD software free of charge. It is the simplest option — you log in, enter your income and expenses, and submit quarterly updates. It lacks invoicing, bank feeds, and receipt scanning, but it is completely free and maintained by HMRC themselves.
Sage Sole Trader — free with NatWest
Sage Sole Trader is free if you have a NatWest, RBS, Mettle, or Ulster Bank business current account. It is a proper accounting package with invoicing, expense tracking, and bank feeds. The catch: it is designed for non-VAT sole traders only.
Zoho Books — free under £50k turnover
Zoho Books offers a free tier for businesses with turnover under £50,000. It includes unlimited invoicing, expense tracking, bank feeds, and multi-currency support. This is arguably the most generous free tier of any MTD-recognised software.
FreeAgent — free with NatWest
FreeAgent is free if you have a NatWest Group business account. It is designed specifically for UK sole traders and freelancers, with strong features like time tracking, mileage, and CIS support.
QuickFile — free under 1,000 transactions
QuickFile is free for sole traders doing under 1,000 transactions per year. It includes bank feeds for 50+ UK banks, multi-currency support, and receipt scanning.
Verdict
If you bank with NatWest, choose FreeAgent — it is the best free option for sole traders. If not, Zoho Books is the best free choice for most businesses under £50k turnover.