MTD software does not have to be expensive. We ranked every HMRC-recognised option by total annual cost, from completely free to the cheapest paid options. Here is the full list.
Ranked by annual cost
| Software | Annual cost | Best for |
|---|---|---|
| HMRC’s free tool | £0 | Very simple affairs |
| Sage Sole Trader | £0 (with NatWest) | Non-VAT sole traders |
| Zoho Books | £0 (under £50k turnover) | Full features on free tier |
| FreeAgent | £0 (with NatWest) | Freelancers |
| QuickFile | £0 (under 1,000 transactions) | Multi-currency on free tier |
| 123 Sheets | £18/year | Spreadsheet users |
| VitalTax | £24/year | Low-cost bridging |
| Abridge | £25/year | Simple bridging |
| AbraTax | £30/year | Small businesses |
| GoFile | £36/year | Full accounting on a budget |
| Pandle | £60/year | Budget option |
| Coconut | £72/year | All-in-one current account |
| Xero | £84/year (Simple plan) | Growing businesses |
| QuickBooks | £120/year (Sole Trader) | Intuit ecosystem users |
| Sage Accounting | £168/year (Start plan) | VAT-registered businesses |
Free options
Five MTD-recognised software options are completely free if you qualify:
- HMRC’s free tool — free for everyone, but very basic
- Sage Sole Trader — free with NatWest/RBS/Mettle/Ulster
- Zoho Books — free under £50k turnover
- FreeAgent — free with NatWest/RBS/Mettle/Ulster
- QuickFile — free under 1,000 transactions/year
Cheapest paid options
If you do not qualify for any free tier, the cheapest paid options are:
- 123 Sheets — £18/year. The most popular MTD tool in the UK.
- VitalTax — £24/year. Low-cost bridging for spreadsheet users.
- Abridge — £25/year. Simple, low-cost bridging.
- AbraTax — £30/year. Small business bridging.
- GoFile — £36/year. Full accounting on a budget.
Verdict
If you qualify for a free tier, use it. FreeAgent (with NatWest) and Zoho Books (under £50k) offer the best free experience. If you do not qualify, 123 Sheets at £18/year is the cheapest and most popular option. For full accounting features on a budget, GoFile at £36/year is excellent value.
FAQ
What is the cheapest MTD software?
HMRC’s own tool is free for everyone. Among paid options, 123 Sheets is the cheapest at £18/year.
Is free MTD software any good?
Yes. Free tiers of commercial software offer full features. HMRC’s free tool is basic but functional for simple affairs.
Can I switch from free to paid later?
Yes. Most free tiers are entry-level plans. You can upgrade at any time without losing your data.