What software does HMRC recommend for MTD?

HMRC provides its own free MTD tool for Income Tax, which is fully MTD ITSA compliant and free for everyone. Beyond that, HMRC maintains a list of recognised software that can submit quarterly updates and End of Period Statements directly to its systems.

Is there a free MTD software option?

Yes. HMRC's own free tool is free for everyone, with no subscription, sign-up fees, or bank account requirement. It is fully MTD ITSA compliant and covers quarterly updates and the End of Period Statement, though it lacks invoicing, bank feeds, and automation.

Does HMRC have its own MTD tool?

Yes. HMRC provides its own free web-based MTD tool for Income Tax. It is built by the same department that runs the scheme, so there is no recognition question — it is fully MTD ITSA compliant and covers quarterly updates and the End of Period Statement.

Is HMRC's free tool any good?

It depends on your needs. It is genuinely free, fully MTD ITSA compliant, and the simplest option — ideal for very simple affairs with no invoicing. But it has no bank feeds, receipt scanning, or automation, so it suits only basic record-keeping. It rates 3.5 out of 5.

Updated on 15 September 2026

HMRC’s own free MTD tool review (2026): the government option

Name: HMRC's own free MTD tool review (2026)
Item: HMRC's own free tool
Rating: 3.5
Author: Alex Quinn

Prices and features last verified on 20 September 2026. Sources: HMRC website, HMRC MTD software list.

*HMRC’s own free tool is built by HMRC itself — fully MTD ITSA compliant and free for everyone. It’s basic: no invoicing, no bank feeds, no automation. Best for people with very simple affairs who don’t invoice clients. Rated 3.5/5 for simplicity and price.

Yes, the government has one too. Alongside the commercial software on this site, HMRC offers its own free tool that lets you meet your Making Tax Digital for Income Tax (MTD ITSA) obligations without paying for anything. It’s a web-based tool — nothing to install — and it’s free for everyone, with no bank requirements, no sign-up fees, and no tiered plans.

The flip side is that it’s genuinely basic. If you want invoicing, bank feeds, receipt scanning, or multi-currency support, this isn’t the tool for you. It exists to do one job: get your quarterly updates and End of Period Statement to HMRC. For a lot of sole traders, that’s precisely what they need.

Who is HMRC’s free tool best for?

Anyone who wants the simplest possible free MTD solution and doesn't need invoicing or bank feeds

The sweet spot is someone with simple finances — a handful of income streams, a modest number of expenses, and no invoices to send or receive. If you don’t invoice clients, don’t need bank feeds, and don’t mind entering figures by hand each quarter, the free tool does everything HMRC requires of you.

What it does

Quarterly updates — submit your income and expenses summary to HMRC four times a year.
End of Period Statement (EOPS) — confirm your final figures for the tax year.
Income and expense tracking — record the basics HMRC needs to see.

Limitations

No invoicing — you can’t create or send invoices.
No bank feeds — every entry is manual.
No receipt scanning — you’ll file expenses by hand.
No multi-currency — UK transactions only, essentially.

MTD status

HMRC’s own tool is fully MTD ITSA compliant — it’s built by the same department that runs the scheme, so there’s no recognition question at all. See the official guide to using MTD software on gov.uk for how to access it.

Pros & cons

Pros

100% free, from HMRC directly — no subscription, no software to install
Fully MTD ITSA compliant — it comes from the people who run the scheme
No sign-up fees, no bank account requirement

Cons

Very basic — no invoicing, bank feeds, receipt scanning, or multi-currency
No automation — manual data entry throughout
The right tool only for people with very simple finances

Verdict

Use HMRC’s free tool only if you have very simple finances and don’t need invoicing. For that audience it’s genuinely the simplest option available — free, from a trusted source, and fully compliant. If you invoice clients, want bank feeds, or dread typing the same numbers in by hand every quarter, spend a few pounds a month on one of the tools elsewhere on this site instead.

Frequently asked questions

Is HMRC’s free tool actually free?

Yes. It’s provided by HMRC directly — there’s no subscription, no sign-up fee, and no hidden paid tier. Everything it offers is free for everyone.

Is HMRC’s tool MTD ITSA compliant?

Yes. It’s built by HMRC for its own MTD scheme, so there’s no recognition question — quarterly updates and your End of Period Statement go straight to HMRC.

Can I send invoices with HMRC’s free tool?

No. The tool is deliberately basic — it covers income/expense tracking, quarterly updates, and your End of Period Statement. There’s no invoicing, bank feeds, or receipt scanning.

Should I use HMRC’s tool or paid software?

If your finances are simple and you never invoice clients, the free tool is enough. If you want bank feeds, invoicing, or less manual data entry, a paid tool like QuickFile or Xero is worth the money.