Our recommended MTD software
There is no shortage of MTD software. This page cuts through it and says what we actually recommend, by situation.
Why the right software depends on your situation
There is no single answer to "what software should I use for MTD?" The right product depends on what your income looks like, how your properties are managed if you have them, and how complex your affairs are.
Most sole traders and landlords fall into one of the situations below. For each one, we name the product we recommend and explain why. These recommendations reflect our view at the time this page was last updated and are reviewed periodically, since software products change.
For most sole traders: FreeAgent
FreeAgent is our default recommendation for sole traders with straightforward affairs. It was built specifically for freelancers and self-employed people in the UK, and that focus shows in how it works.
It handles everything MTD requires in one place: digital record keeping, quarterly updates submitted directly to HMRC, and the year-end tax return. Quarterly submissions are auto-populated from the records you have already entered, so filing is a matter of checking the figures and pressing send.
Beyond MTD, it gives you a real-time estimate of your tax bill throughout the year, so there are no surprises in January. The interface is designed for people who are not accountants, which is why it won the Institute of Certified Bookkeepers Luca Award for Friendliest Software of the Year in 2024.
On cost, FreeAgent is free for business account holders with NatWest, Royal Bank of Scotland, Ulster Bank, or Mettle. That gives you access to the standard FreeAgent product, subject to the bank-account eligibility conditions, for as long as you hold the account. Optional add-ons are chargeable separately. If you bank elsewhere, the sole trader plan costs £19 per month plus VAT, or £190 per year. There is also a 30-day free trial.
The free route via Mettle. Mettle is a free business bank account from NatWest Group. Opening a Mettle account gives you FreeAgent free with no time limit, provided you make at least one transaction per month. If you are looking for a business account anyway, this combination is worth considering.
When FreeAgent is not enough: Xero
FreeAgent is the right answer for most sole traders, but it has limits. If your business involves any of the following, we recommend Xero instead.
- You carry stock or run an inventory-heavy operation
- You have a high volume of transactions and need detailed audit trails
- You need custom or in-depth financial reporting beyond the standard profit and loss
- You trade internationally or invoice in multiple currencies
Xero is built to handle more complexity, and it is the platform most UK accountancy firms work in. If your accountant already uses Xero, staying on the same system means a smoother working relationship and less admin at year end.
Xero's entry-level plan (Xero Simple) starts at £7 plus VAT per month for straightforward cases. More complex situations will need a higher tier. Our comparison page covers the options in more detail.
For letting-agent-managed landlords: FreeAgent for Landlords
If a letting agent manages your properties, the monthly statement they send is where bookkeeping gets complicated. A single net payment arrives in your bank account, but behind it is a mix of rent, management fees, repair costs, and other charges that each need to be recorded separately and matched to the right property.
FreeAgent for Landlords now handles this directly. Its AI-powered rental statement tool reads the letting agent's PDF statement, extracts each line item, categorises the transactions, matches them to the correct property, and reconciles the net bank payment. What previously required creating multiple invoices and bills manually now takes seconds. The feature is included in the landlord licence at no extra cost.
Beyond the rental statement tool, FreeAgent for Landlords handles MTD quarterly submissions and the year-end tax return, supports per-property income and expense tracking, and manages joint ownership splits across a portfolio. It is also free for qualifying NatWest, RBS, Ulster Bank, and Mettle account holders, though a separate landlord account is required from any sole trader account you may already have.
If you also have self-employment income. FreeAgent requires separate accounts for each income stream: one for your sole trade and one for your property income. Both can be accessed from a single login, and both can be free via a qualifying bank account. It is more administrative setup than a single account, but it is workable and well-supported.
For self-managing landlords: Hammock
If you manage your own properties and collect rent directly, Hammock is the stronger recommendation. It is a purpose-built landlord accounting platform, not a general accounting product adapted for property, and that distinction matters in day-to-day use.
Once you connect your bank accounts via Open Banking, Hammock reconciles rent payments and property expenses in real time. It automatically matches income and costs to the right property and tenant, so by the time a quarterly MTD deadline arrives, the figures are already there. Filing becomes a review and confirm rather than a quarterly build-from-scratch.
Alongside MTD compliance, Hammock gives you a live view of your portfolio as a business: per-property profit and loss, rental yields, loan-to-value ratios, occupancy rates, and per-tenant arrears balances, all updated in real time. For anyone managing multiple properties or HMOs, this visibility is difficult to replicate in a general accounting product.
Hammock describes itself as the first landlord-specific accounting platform recognised by HMRC for MTD for Income Tax. Pricing starts from £8 per month for up to three properties, with a 30-day free trial available.
One thing to be aware of with Hammock. It covers property income only. If you also have self-employment income, you will need a separate MTD-compatible product for that income stream. Hammock does not handle sole trader income filing.
A note on keeping these recommendations current
Software products change. Pricing moves, features are added or removed, and new products come to market. The recommendations on this page reflect our view at the time shown in the "Last updated" date above, and we review them periodically.
If you are choosing software now and want to confirm our current thinking, or if your situation is more complicated than the cases above, get in touch. We are happy to advise before you commit to anything.
Common questions
Any product on HMRC's recognised software list can form part of a compliant setup, but check that the specific plan covers the income sources and submission types you need. Our recommendations are based on what we find works well in practice for each type of client, but the final choice is yours. If you are already using something that is working well, there is rarely a good reason to switch just because it is not on our list.
Yes, for business account holders with NatWest, Royal Bank of Scotland, Ulster Bank, or Mettle, subject to the bank-account eligibility conditions. You get access to the standard FreeAgent product for as long as you keep the account. Optional add-ons are chargeable separately. If you bank elsewhere, there is no free tier, though a 30-day trial is available and the paid sole trader plan is £19 per month plus VAT. Mettle users must make at least one transaction per month to retain free access.
Yes. For clients who want us to manage their MTD compliance, we handle the software setup, connect the bank feeds, register with HMRC, and file every quarterly update and year-end tax return. You do not need to log into the software yourself unless you want to. Our service is a fixed monthly fee that covers the whole process.
Having both types of income means you need separate MTD submissions for each MTD business source. Some products handle that within one account; others require separate accounts or separate products. The right setup depends on your specific combination of income, properties, and banking arrangements. The best step is to speak to us directly.
This page covers the most common situations, but not every one. If you have multiple businesses, foreign income, unusual property structures, or anything that does not map neatly to the cases above, get in touch. Picking the wrong software at the start is easier to avoid than it is to fix later.
This page is general guidance, not advice for your own circumstances. It was correct as at the date shown at the top, and tax rules and rates change over time. Software products and pricing also change; the recommendations here reflect our view at the time of writing and are reviewed periodically. Please take advice on your own position before acting on anything here.
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