Cheapest HMRC-recognised MTD software for sole traders (2026)
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Short answer: the cheapest routes are free: a Tide business account, ANNA's free plan, Sage Sole Trader's free tier, or Starling's Accounting Essentials if you already bank with Starling. If you want proper bookkeeping with bank feeds, Pandle Pro (£5 + VAT), Sage Sole Trader (£7 ex VAT) and Xero Simple (£7 ex VAT) are the cheapest paid options.
Prices were checked on each vendor's own pricing page on 4 October 2026.
Ranked by yearly cost
We've worked out what you'd pay over 12 months at the regular price, including VAT where the vendor charges it on top. Sole traders who aren't VAT-registered can't reclaim it, so the VAT-inclusive figure is what you'll really pay.
| Rank | Option | What you get for MTD | Regular monthly price | Approx. yearly cost |
|---|---|---|---|---|
| 1 | Tide free business account | Quarterly updates and final declaration in the app | £0 | £0 |
| 1 | ANNA free plan | MTD filing on all plans; free spreadsheet bridge for quarterly updates | £0 | £0 |
| 1 | Sage Sole Trader free tier | Quarterly updates and Self Assessment; one bank feed | £0 | £0 |
| 1 | Starling Accounting Essentials | MTD for Income Tax submissions | £0 (Starling customers only) | £0 |
| 5 | Pandle Pro | Full bookkeeping with bank feeds and MTD submissions | £5 + VAT | £72 |
| 6 | Sage Sole Trader paid | As free tier, plus multiple bank accounts | £7 ex VAT | £100.80 |
| 6 | Xero Simple | Full bookkeeping, quarterly updates and final declaration | £7 ex VAT | £100.80 |
| 8 | QuickBooks Sole Trader Plus | Full bookkeeping | £10 + VAT* | £144 |
| 9 | Coconut MTD filing | Bookkeeping, quarterly updates and year-end declaration | £12.99 (or £129.99/yr) | £129.99 |
| 10 | FreeAgent Sole Trader | Full bookkeeping | £19 ex VAT | £273.60 (free with NatWest, RBS, Ulster or Mettle) |
*QuickBooks loads prices by script and advertises a 90%-off introductory offer; we couldn't confirm whether £10 is the regular price. Check before you buy.
The catches with free options
Free isn't always the whole job. Before you choose, check these:
- Tide and ANNA are bank accounts. The free MTD features work best when your business money runs through them. That's sensible anyway (see do you need a separate bank account?), but it means opening a new account.
- ANNA's free bridge only does quarterly updates. You'll file the year-end return separately. The paid ANNA plans start at £12.90 + VAT.
- Sage's free tier allows one bank feed. Fine for most sole traders; awkward if you have a card account too.
- Starling's free tier is for Starling customers. Its paid Accounting Plus is £7 until April 2027, then £14.
- Pandle's free plan doesn't include MTD. You need Pro.
Which cheap option fits you
You don't have a business account yet: open a free Tide or ANNA account and use the built-in MTD tools. You get a separate account and compliance for £0.
You already bank elsewhere and want proper books: Sage Sole Trader (free or £7) or Xero Simple (£7) give you full bookkeeping, bank feeds and both MTD submissions.
You keep everything in a spreadsheet: use a bridge. ANNA's is free for the quarterly part. Read bridging vs full software first.
You're VAT-registered: the cheap "sole trader" plans above (Xero Simple, QuickBooks Sole Trader Plus) are for non-VAT businesses. You'll need a plan that also does MTD for VAT, which usually costs more.
Is the cheapest option good enough?
For most sole traders with one income stream, yes. HMRC doesn't give extra credit for expensive software. What matters is that it's on HMRC's list, does both the quarterly updates and the final declaration, and that you actually keep it up to date. A free tool you use every month beats a £30 one you open once a quarter in a panic.
Check any product on HMRC's find software tool before you sign up.
Who has to do this, and when
You need MTD-compatible software from 6 April 2027 if your combined gross income from self-employment and property was over £30,000 in 2025–26. The threshold falls to £20,000 from April 2028. Income from a PAYE job doesn't count towards it. Full details in our April 2027 guide.
Sources: vendor pricing pages (checked 4 October 2026); GOV.UK: check if you're eligible; GOV.UK: find compatible software.
Keep your records in a spreadsheet or a bank account?
MTD Totals turns a bank statement CSV into cumulative MTD quarterly totals and Self Assessment figures, sorted into HMRC categories. It runs in your browser, so nothing is uploaded. Free to try, £9 once to unlock everything.
Try it with your bank CSV