Free MTD software for Income Tax: what is free, and what the catch is.
You do not have to pay for Making Tax Digital software. We checked eleven free routes. Each one can send your quarterly updates to HMRC. What differs is the catch.
Last checked 23rd September 2026.
The short answer. If you are a sole trader, you are not VAT registered and your records are simple, a free route will very likely cover you. The main choice is between standalone software and a bookkeeping tool built into a business bank account. If you are VAT registered, most free routes will not do everything you need. The exceptions in our table are Pandle Free, My Tax Digital, Mettle with FreeAgent, and FreeAgent through NatWest, RBS or Ulster Bank.
| Route | Type | Needs a particular bank? | VAT included? | Main catch |
|---|---|---|---|---|
| Sage Sole Trader Free | Standalone software | No | No | One bank account, 25 automatically sorted transactions and 5 invoices a month |
| Pie Tax app | Standalone app | No | Check | The app is free; tax help from Pie is paid |
| Clear Books MTD Income Tax Free | Standalone software | No | No | No time limit; VAT, several users and payroll are paid |
| Pandle Free | Standalone software | No | Yes | Bank feeds and receipt uploads are in the paid Pro plan |
| My Tax Digital | Standalone, or a link from your spreadsheet | No | Yes | Browser-based; check any wider accounting needs separately |
| Tide | Built into a business account | Tide | No | Account transaction fees can apply |
| Starling Accounting Essentials | Built into a business account | Starling | No | When checked, Starling described the end-of-year return as coming soon |
| Monzo Business Lite | Built into a business account | Monzo | No | No accountant access; spending from other accounts is entered by hand |
| Mettle with FreeAgent | Software free with an account | Mettle | Yes | At least one Mettle transaction a month, or FreeAgent starts charging |
| FreeAgent through NatWest, RBS or Ulster Bank | Software free with an account | NatWest group business current account | Yes | Free only while you keep the account; account fees are separate |
| ANNA | Filing service | No, it connects to any UK bank | No | Free offer stated for the 2026 to 2027 tax year; later years' price not stated |
Provider pages checked 22nd and 23rd September 2026. "Free" here means no subscription charge for the Making Tax Digital part at the level we checked. It does not mean every account transaction, optional feature or related service is free. Prices and conditions change, so check the provider's own page before you sign up.
What free MTD software has to do
HMRC says the software you use must create, store and correct digital records of your self-employment and property income and expenses, send your quarterly updates to HMRC, and let you add any other income and submit your tax return by 31st January. Every route in the table above sends quarterly updates. How much of the rest each one covers is shown in the catches, so read those before you choose.
HMRC is open about the limits. Its guidance says free products are available for those with simple tax affairs but there may be limits on how the product can be used
. That is the right way to think about it: free is fine when your affairs are simple, and the limits start to matter as they become more complicated.
Which free route suits which sole trader
You do not want to change bank. Start with the standalone options: Sage Sole Trader Free, Clear Books, Pandle, the Pie app or My Tax Digital. None of them needs a particular bank account. Sage's free plan is the tightest on volume, with 5 invoices and 25 automatically sorted transactions a month, so a busy trader may outgrow it quickly.
You already bank with Tide, Starling, Monzo, Mettle or a NatWest group bank. Check what your bank already gives you before signing up to anything else. Using the tool built into the account you already have usually means less copying of figures. Our business account page compares these in more detail.
You keep your records in a spreadsheet and want to carry on. You may not need accounting software at all. My Tax Digital can take figures from a spreadsheet and send them to HMRC. Our spreadsheet page explains how this works and when it is a poor fit.
You are VAT registered. Most free routes stop at Income Tax. In our table, Pandle Free, My Tax Digital, Mettle with FreeAgent, and FreeAgent through a NatWest group bank include VAT. Otherwise, expect to pay.
If you are also a landlord
Most of the routes above accept property income as well as self-employment, but the details differ, and some treat the two as separate accounts. Our landlords page covers the free options for property income, including how each handles someone with both kinds of income.
Our rule for the word "free"
We separate the software subscription from account charges, transaction fees, optional extras and VAT features. That lets the finder show a £0 route without pretending that every possible use of the provider costs nothing.
When paying makes sense
A free product can still be the wrong fit. Paying is usually worth it if you need VAT in the same product, want your accountant to work in the software with you, run more than one business, or want bank feeds and automatic sorting to save time each quarter. The step up is often small: when we checked, Pandle Pro was £5 a month plus VAT, Clear Books' paid plans started from £5 a month, and Sage Sole Trader was £7 a month plus VAT after its introductory offer. Cost is one of the things we rank on, not the only one. Our best MTD software page shows our picks for each situation, and our ranking method explains the rest.
Is there free MTD software from HMRC?
No. HMRC does not make its own software for Making Tax Digital for Income Tax. It keeps a list of products that have passed its recognition process, and some of them are free. Our page on HMRC's software list explains how to use it and what it will not tell you.
Questions people ask
Is free MTD software good enough?
For many sole traders, yes. If you are not VAT registered, have one business and keep simple records, a free route is likely to cover what the law requires. The table above shows the limits, or catches, for each one.
Can I use two free products together?
Not for the same submission. HMRC says you can only use one product for each separate submission you need to make. For example, a landlord cannot use more than one product to send quarterly updates of property income.
Do free routes include the end-of-year tax return?
Most of the routes in our table include it. When we checked, Starling's page still described its end-of-year declaration as coming soon, and ANNA's free offer states one final update for the 2026 to 2027 tax year. Check the provider's own page before you rely on it.
What happens if I send a quarterly update late in the first year?
HMRC says it will not apply penalty points for late quarterly updates during the 2026 to 2027 tax year. You must still send them before you submit your tax return.
Find my cheapest route See all 21 checked routes
Sources
- GOV.UK, Choose the right software for Making Tax Digital for Income Tax, checked 23rd September 2026.
- GOV.UK, Send quarterly updates, checked 23rd September 2026.
- Each provider's own pricing or Making Tax Digital page, checked 22nd and 23rd September 2026. The address for each is in our comparison database.