The best MTD software for sole traders in 2026

As a sole trader, your MTD software has one main job. It needs to track your trading income and expenses through the year, then send a short quarterly update to HMRC. That means invoicing customers, keeping receipts and logging mileage matter more than anything else. This page focuses on exactly that. If you also earn rent, our main MTD software list covers landlords too.

The rules depend on your turnover. If your qualifying income (your takings before expenses) was over £30,000 in the 2025 to 2026 tax year, you must use MTD from 6 April 2027 (GOV.UK). We compared the options that suit sole traders best, and checked every price on the provider's own website in October 2026.

The best MTD software for sole traders at a glance

Prices exclude VAT unless stated and were checked on each provider's website in October 2026. Introductory offers change often, so always confirm the live price. App ratings are from the UK App Store and Google Play in October 2026.

Our top picks for sole traders in detail

FreeAgent is our top pick for sole traders who already have an eligible bank account. It is free with a NatWest, RBS or Ulster Bank business account, or with Mettle if you make at least one transaction a month. You get bank feeds (your bank transactions flow in automatically) and a running tax estimate, so you can see roughly what you'll owe as you go. Its app is rated 4.8 on iOS. FreeAgent pays us nothing, and we rank it first on merit.

Watch out for: without an eligible bank account, the sole trader plan costs £19 a month ex VAT, which is more than most rivals. Read our FreeAgent review or see how it stacks up in FreeAgent vs Xero.

Xero is the best choice if you don't have a free FreeAgent route. The Simple plan costs £7 a month ex VAT and is designed for sole traders and landlords. It handles MTD quarterly updates and your tax return, and most UK accountants know it well. When you grow, you can move to plans with VAT returns, payroll and CIS without changing software.

Watch out for: Simple does not do VAT returns, and automatic bank reconciliation is a paid add-on on the cheapest plans. Full price: Simple £7, Ignite £18, Grow £39, Comprehensive £55, Ultimate £70 a month, all ex VAT. Promotional discounts often run for new customers.

QuickBooks Sole Trader Plus costs £10 a month ex VAT and is built around your phone. Providers say you can snap receipts, track mileage with GPS and see a live tax estimate. That makes it a natural fit for tradespeople, cleaners and drivers who spend the day on the road. Its apps are rated 4.7 on iOS and 4.6 on Android.

Watch out for: Sole Trader Plus does not do VAT returns, and it only suits landlords with one property. Intro offers apply to new customers and change often.

Sage Sole Trader has a free plan that covers MTD for Income Tax if you're not VAT registered. The paid plan is £7 a month and removes the free plan's limits. The dedicated Sole Trader app is rated 4.7 on iOS and 4.8 on Android, which is strong.

Watch out for: the free plan limits invoices and automatically sorted transactions each month. If you register for VAT, you'll need to move to Sage Accounting, which starts at £20 a month.

Clear Books offers a free Sole Trader plan with MTD included, and it doesn't expire. Paid plans start at £5 a month and add bank feeds. It also supports CIS, which matters if you work in construction. It suits sole traders with simple records who are happy to work on a laptop.

Watch out for: the app is poorly rated (2.9 on iOS), and the free plan has no bank feeds, so you type transactions in yourself.

Zoho Books' free plan includes MTD for Income Tax and VAT returns for one user, with up to 1,000 invoices a year. That makes it a good fit if you send many invoices, or if you're VAT registered but want to avoid a monthly bill. Its apps score 4.8 on both stores.

Watch out for: bank feeds start on the £12 Standard plan. The software has more options than many sole traders need, so it can feel busy at first.

Starling's sole trader account has no monthly fee and builds MTD for Income Tax tools into the banking app. If all your business money already goes through Starling, your income and spending are in one place, which keeps things simple. Its app is rated 4.9 on iOS.

Watch out for: fees apply to cash deposits. Starling does not state landlord or CIS support, so check first if either applies to you.

Coconut is a mobile-first app for sole traders and landlords. It sorts your spending, helps you set aside tax and can file MTD updates. MTD filing costs £12.99 a month or £129.99 a year, and there's a cheaper bridging option at £49.99 a year if you keep your own records. Coconut pays us nothing.

Watch out for: Coconut does not state VAT or CIS support, so it suits simpler businesses. Full price: MTD Bridging £49.99 a year, Bookkeeping £16.99 a month, MTD filing £12.99 a month or £129.99 a year.

Crunch combines software with access to accountants. Its Plus plan at £10 a month ex VAT includes MTD for Income Tax, and full accountancy packages start at £27 a month. It suits sole traders who want help close by without hiring a separate firm.

Watch out for: Crunch's Free and Lite plans do not include MTD for Income Tax, so you need Plus or above. Its iOS app is rated 3.5.

Can I get MTD software free with my bank?

Yes, and this is the biggest money saver for sole traders. Four providers link MTD tools to a business bank account:

Prices exclude VAT unless stated and were checked on each provider's website in October 2026. Introductory offers change often, so always confirm the live price. App ratings are from the UK App Store and Google Play in October 2026.

• FreeAgent is full accounting software, free with NatWest, RBS, Ulster Bank or Mettle (one transaction a month).
• Starling builds MTD tools into its free sole trader account.
• Tide has a free accounting plan, with paid plans from about £12.49 a month. Tide shows different sole trader prices on different pages, so check before you buy. Tide says it is not suitable for CIS users.
• ANNA includes MTD filing on all plans. The free plan charges 0.95% on money coming in above £1,000 a month, so it can cost more than it looks if your turnover is high.

The catch is that a bank-linked tool works best when all your business money goes through that one account. If you take cash or use several accounts, standalone software is often tidier.

What should MTD software do for a sole trader?

HMRC only requires two things: digital records, and quarterly updates plus a yearly tax return sent from compatible software (GOV.UK). Day to day, though, the best software for a sole trader also helps with:

• Invoicing: sending professional invoices and seeing who still owes you.
• Receipts: photographing receipts so you never lose an allowable expense.
• Mileage: logging business journeys, which is useful if you drive to jobs.
• Tax estimates: showing roughly what you'll owe, so January isn't a shock.

Here's an illustration. Sam, a self-employed plumber, had takings of £34,000 in 2025 to 2026 before expenses. That's over £30,000, so Sam must use MTD from 6 April 2027. Sam invoices most jobs, buys parts at merchants and drives between sites. QuickBooks or Xero would suit Sam well, and FreeAgent would be free if Sam banks with NatWest. Sam's first quarterly update would cover 6 April to 5 July 2027 and be due by 7 August 2027 (GOV.UK).

If bookkeeping features matter most to you, see our best bookkeeping software for sole traders, which compares them feature by feature.

How to choose MTD software as a sole trader

1. Check your bank first. NatWest, RBS, Ulster Bank or Mettle customers should try FreeAgent, because it's free. Starling, Tide and ANNA customers can try the built-in tools.
2. Think about where you work. If you're out on jobs all day, choose a strong app, such as QuickBooks, Xero or FreeAgent.
3. Are you VAT registered, or close? Avoid plans without VAT, such as Xero Simple or QuickBooks Sole Trader Plus, or plan to upgrade.
4. Do you work under CIS? Choose software that records CIS deductions. See our CIS subcontractor guide.
5. Do you want help? Crunch includes accountants, or you can ask your own accountant which software they prefer.

What is the best MTD software for my trade?

Different trades have different needs. Builders need CIS, cleaners send lots of small invoices, and drivers rack up mileage. We've written trade-specific guides:

• Best MTD software for builders
• Best MTD software for electricians
• Best MTD software for cleaners
• Best MTD software for hairdressers
• Best MTD software for taxi and Uber drivers

Who should not buy sole trader MTD software yet?

If you think MTD isn't reasonable for you because of age, health, disability, religious belief or no internet access, you can apply for a digital exclusion (GOV.UK). Cost or never having used software are not accepted reasons.

How we chose these

We started from HMRC's list of MTD for Income Tax software and kept products that suit sole traders. We then scored each one on price, free options, invoicing, receipt and mileage tools, app ratings, bank feeds and support, based on our review of features, pricing and user ratings. Affiliate commission plays no part in the order. Our top pick, FreeAgent, pays us nothing, and neither does Coconut. Read how we test.