Start with what you already do, not with a software brand.
If you already have good digital records, you may need very little. If you are starting from paper, a free bookkeeping or account-based route may save more work than a submission-only bridge.
Who has to use MTD?
For sole traders, HMRC looks at qualifying income from self-employment and property together. The thresholds are more than £50,000 for the 2026 start, more than £30,000 for 2027 and more than £20,000 for 2028.
Four routes to compare
- Free standalone software: Sage currently has a £0 Sole Trader plan for non-VAT users.
- Free with an account: Tide and Starling include MTD tools with eligible free account routes, and ANNA has a £0 plan with free MTD filing.
- Keep a spreadsheet: bridging software can connect existing records to HMRC.
- Paid bookkeeping software: Xero, QuickBooks, FreeAgent and others can be worth paying for when broader bookkeeping or accounting features matter.
VAT can change the answer
A free non-VAT plan may stop being suitable once VAT is involved. That is why the finder asks about VAT before it ranks products. It also uses price excluding recoverable VAT for VAT-registered users and cash price including VAT for non-VAT users where appropriate.
Do you need a business bank account?
A sole trader is not generally required to open a separate business bank account merely because they are a sole trader. Some MTD routes nevertheless bundle their tools with an account. MTD Magpie treats that as an optional route, not as a requirement.