Best Accounting and MTD Software for Sole Traders (UK, 2026)
MTD for Income Tax is live. You need compliant software. The internet is full of affiliate-stuffed listicles that recommend whatever pays the best commission. This isn't one of those.
Quick answer
For UK sole traders, FreeAgent is the best overall choice: it is completely free with a NatWest, RBS or Mettle account and fully MTD ITSA compliant. Xero Ignite (£18 a month) has the strongest ecosystem and accountant support, Xero Simple and Sage Sole Trader (£7 each) and QuickBooks Sole Trader (£10) are the cheapest paid routes to MTD for Income Tax, Sage Accounting (from £20) includes payroll, and IQ Books has a free plan that files your MTD quarterly updates. MTD for Income Tax went live in April 2026 for income over £50,000, with £30,000 following in April 2027 and £20,000 in April 2028, so HMRC-recognised software is now a requirement, not a preference.
- FreeAgent is completely free with a NatWest, RBS or Mettle bank account and fully MTD ITSA compliant.
- MTD for Income Tax started April 2026 for income over £50,000; over £30,000 follows in April 2027 and over £20,000 in April 2028.
- Xero Simple and Sage Sole Trader (£7 each) and QuickBooks Sole Trader (£10) are the cheapest paid routes to MTD for Income Tax.
At a Glance
| Best overall | FreeAgentfree via NatWest/RBS/Mettle, full MTD ITSA, built for sole traders |
| Best ecosystem | Xero Ignite£18/mo, strongest app marketplace, accountant-preferred |
| Best on a budget | QuickBooks Sole Trader£10/mo, MTD-ready, clean self-assessment workflow |
| Best for payroll | Sage Accountingfrom £20/mo, payroll built in (one employee on Start) |
| Best free option | Pandlefree tier, basic bookkeeping, MTD VAT (not ITSA on free tier) |
| Free with MTD filing | IQ Books: free plan files Income Tax quarterly updates and VAT returns to HMRC; the final declaration goes through other MTD software or your accountant |
| MTD ITSA deadline | April 2026 for income over £50,000. April 2027 for income over £30,000. April 2028 for income over £20,000. |
If you're self-employed in the UK, as a sole trader or freelancer, and earning above £50,000, the clock has already started. Making Tax Digital for Income Tax Self Assessment went live in April 2026, and you need HMRC-recognised software to file quarterly updates digitally. If you earn between £30,000 and £50,000, you have until April 2027, but choosing now gives you a full year to get comfortable before deadlines bite. The same tests apply if you call yourself a freelancer or contractor: the best accounting software for self-employed people is chosen exactly the way the best sole trader accounting software is.
The market has about a dozen credible options. Most of them will do a perfectly adequate job. The question isn't "which software is best?" in the abstract. It's "which software fits my specific situation?", and that depends on who you bank with, whether you have an accountant, how much you're willing to spend, and what you actually need beyond basic compliance.
We integrate with most of these platforms through our bookkeeping automation tools, so we've seen how each one behaves in practice, not just in marketing demos. No affiliate links here. No commissions influencing the rankings.
What MTD for Income Tax actually requires
Before comparing software, it's worth being precise about what you're legally required to do. There's a lot of noise around MTD, and some of it is vendors trying to scare you into buying more than you need.
The legal requirements
- Keep digital records of your income and expenses (not spreadsheets linked to HMRC, proper MTD-compatible software)
- Send quarterly updates to HMRC summarising your business income and expenses
- Submit a final declaration instead of a Self Assessment tax return
- April 2026 start for self-employment or property income over £50,000
- April 2027 start for income over £30,000
- April 2028 start for income over £20,000
The quarterly updates are summaries, not line-by-line breakdowns. The software handles the submission format. Your job is to keep your records up to date and categorise things correctly. That's it.
Critical check: is your software HMRC-recognised?
HMRC does not recommend any one product. It publishes an official list of software for MTD for Income Taxevery entry having been through its recognition process, with a software finder that asks a few questions and narrows the list to what fits you. Not every accounting package has made the cut, so check before committing. All five platforms reviewed below are on it.
Best MTD software for sole traders: the short answer
If the question that brought you here is narrower, which is the best Making Tax Digital software for sole traders, the answer turns on two things: what you pay, and whether the software also makes your final declaration or only the quarterly updates.
- Free, if you bank with NatWest, RBS or Mettle: FreeAgent, which handles the quarterly updates and Self Assessment.
- Free, whoever you bank with: IQ Books. The free plan keeps the digital records and sends your quarterly updates to HMRC (it is on HMRC's list of software for MTD for Income Tax). The final declaration has to be submitted with MTD software that supports it, or by your accountant, so plan for that one step at year end.
- Cheapest paid route with Self Assessment filing built in: QuickBooks Sole Trader at £10 a month.
- Cheapest paid route if you are not VAT registered: Xero Simple at £7 a month (up to 10 invoices a month), with Ignite at £18 for the full Xero ecosystem and accountant support.
- Payroll included: Sage Accounting from £20 a month (one employee on Start and Standard, five on Plus).
- Free, if you are not VAT registered and very low volume: Sage Sole Trader Free, with tight caps (below).
The easiest MTD software for sole traders is usually the one that does both halves, quarterly updates and the final declaration, in one place, or the one your accountant already uses. Each is covered in detail below, with the trade-offs the pricing pages leave out. For the rules themselves, from qualifying income to the four quarterly deadlines, see Making Tax Digital for sole traders who have never kept books. To see roughly what you will owe, try our free self-employed tax calculator. How IQ Books handles both regimes is on our MTD software page.
Free MTD software for sole traders
Free MTD for Income Tax software exists, but every free route has a condition: who you bank with, how much you do, or which half of MTD it covers. HMRC's own guidance says free products are aimed at people with simple tax affairs and may limit how much you can use them, for example with a cap on transactions.
To see every free product HMRC has recognised, use the software finder on GOV.UK's Choose the right software for Making Tax Digital for Income Tax page. If you keep your records in a spreadsheet, bridging software can send the quarterly updates from it instead.
How to do bookkeeping as a sole trader
Bookkeeping software for sole traders and the fuller accounting packages for sole traders differ in depth, but the routine is the same, and under MTD it has to live in software rather than a shoebox:
- Keep business money separate. A separate account for the business makes every bank line a business line.
- Connect the bank feed. Every option reviewed here pulls transactions in automatically, so you are categorising, not typing.
- Categorise weekly. Give each line an expense category that maps to HMRC's self-employment headings, and keep the receipt with it.
- Invoice from the software, so sales are recorded as you raise them.
- Send the quarterly updates once MTD applies to you, then the final declaration after the tax year ends.
Ten minutes a week keeps it current. For the full routine from a standing start, see Making Tax Digital for sole traders who have never kept books.
1. FreeAgent
Best Overall for Sole TradersFreeAgent is owned by NatWest Group, which is both its greatest strength and its most significant limitation. If you bank with NatWest, RBS, or Mettle, FreeAgent is completely free. Not a trial. Not a reduced version. The full product, indefinitely, at no cost.
For a sole trader, that's a genuinely hard offer to beat. FreeAgent was designed from the start for freelancers and sole traders, and it shows. The interface makes sense to people who aren't accountants. It handles Self Assessment, MTD for Income Tax, expenses, invoicing, and bank feeds without requiring you to understand double-entry bookkeeping.
Strengths
- Free with NatWest, RBS, or Mettle
- Full MTD ITSA compliance
- Self Assessment filing built in
- Designed specifically for sole traders
- Automatic bank feed categorisation
- CIS support for subcontractors
Limitations
- £19/mo + VAT if you don't bank with NatWest
- Smaller app ecosystem than Xero
- Limited inventory management
- Reporting is functional, not deep
- Multi-currency support is basic
Who it's for: Sole traders and freelancers, especially those banking with NatWest, RBS, or Mettle. If you don't have complex inventory, multi-currency needs, or a demanding accountant who insists on Xero, FreeAgent is the simplest path to MTD compliance.
2. Xero
Best EcosystemXero is the default recommendation from most UK accountants, and for good reason. Its app marketplace is the largest in the UK accounting ecosystem, it handles multi-currency elegantly, and if you ever outgrow sole trader status, you won't need to migrate to a different platform.
The catch for sole traders is price. Xero's cheapest route to MTD for Income Tax is the Simple plan at £7/month + VAT, built for sole traders and landlords who aren't VAT registered, but it caps you at 10 invoices and quotes a month. Most trading sole traders end up on Ignite at £18/month, which is £216/year for something you could get free from FreeAgent. The question is whether Xero's broader ecosystem justifies the cost.
Strengths
- Largest UK app ecosystem (1,000+ integrations)
- Most accountants know and prefer Xero
- Scales from sole trader to limited company
- Strong multi-currency handling
- Excellent bank reconciliation workflow
- Payroll on every plan (one person included from Grow)
Limitations
- Simple (£7/mo) caps you at 10 invoices a month; most traders need Ignite (£18/mo)
- Steeper learning curve than FreeAgent
- Interface assumes accounting knowledge
- No Self Assessment filing (need bridging or accountant)
- Feature-rich plans jump to £39+/mo (Grow)
Who it's for: Sole traders who work with an accountant (who likely already uses Xero), those expecting to hire staff or incorporate, or anyone who needs multi-currency or a wide range of app integrations. If you're a graphic designer invoicing three clients a month, Xero is probably overkill. If you're a consultant with international clients and a growing team, it's the right foundation.
3. QuickBooks
Best Value Paid OptionQuickBooks' Sole Trader plan at £10/month is one of the cheapest paid routes to full MTD ITSA compliance. It includes Self Assessment filing, and the interface is less intimidating than Sage. For sole traders who don't qualify for free FreeAgent and don't need Xero's ecosystem, it's a strong middle ground.
Intuit (QuickBooks' parent company) has invested heavily in the UK market over the past two years, and it shows. The MTD workflow is clean, the Self Assessment integration is genuinely useful, and the mobile app is solid for tracking expenses on the go.
Strengths
- £10/mo for full MTD ITSA compliance
- Self Assessment filing built in
- Clean, modern interface
- Good mobile app for expenses
- Receipt capture via phone camera
- Strong VAT handling
Limitations
- Smaller UK app ecosystem than Xero
- US-centric design decisions occasionally surface
- Payroll is a paid add-on (£8/mo + £2/employee)
- Customer support can be slow
- Bank feed matching less sophisticated than Xero
Who it's for: Budget-conscious sole traders who want a clean, modern tool with Self Assessment filing included. Particularly good for freelancers who need expense tracking on mobile and don't have complex reporting needs.
4. Sage Accounting
Best for PayrollSage is the old guard of UK accounting software. If you've ever worked in a UK office that used desktop Sage 50, you'll recognise the DNA. Cloud Sage is a different product, genuinely modern, reasonably intuitive, but it still carries the advantage of being the name that millions of UK businesses already know.
For sole traders, Sage now comes in two shapes. Sage Sole Trader is for the self-employed who are not VAT registered: a free version (one bank account, five sales invoices a month, 25 auto-categorised transactions) and a paid version at £7 a month that removes the caps and adds CIS and receipt capture. Sage Accounting is the full package, from £20 a month, and its standout is payroll: Start and Standard include one employee and Plus includes five, with each extra employee at £1.85 a month.
Strengths
- Payroll included on Accounting plans (one employee on Start)
- Free Sole Trader plan for the self-employed who are not VAT registered
- Strong UK compliance pedigree
- Good CIS features
- Clean migration from Sage 50 desktop
- UK-based phone support
Limitations
- Smaller app ecosystem
- Fewer accountants specialise in cloud Sage
- Interface less polished than competitors
- Multi-currency only on top plan (£59/mo)
- Bank feed matching can be clunky
Who it's for: Non-VAT-registered sole traders who want a free or £7 start, and sole traders who employ staff and want payroll in the same package. CIS subcontractors. Anyone migrating from Sage 50 desktop who values a familiar name and UK phone support.
5. IQ Books
Free plan with MTD filingDisclosure first: IQ Books is ours. It belongs on this list for one reason that matters to sole traders under MTD: the free plan is the whole ledger, and it files. One organisation, invoicing, bank accounts with open banking feeds, receipt capture, VAT returns and your Income Tax quarterly updates to HMRC, with no monthly fee and no bank account you have to open to qualify.
The bookkeeping is the other half of the pitch. Bank lines arrive coded by CodeIQ, our AI coding engine, and you confirm rather than categorise. That automation draws on credits (every account starts with 1,000 free), while anything you code by hand costs nothing. If you are coming from Xero, QuickBooks or Sage, the migration brings your opening balances, contacts and open invoices across in one step, also free.
Strengths
- Free plan includes MTD quarterly updates for Income Tax and VAT returns
- AI coding of bank transactions, receipt capture and bank reconciliation built in
- Grows with you: limited companies, stock, projects and multi-currency on the same ledger
- One-step migration from Xero, QuickBooks or Sage
Limitations
- The MTD final declaration isn't filed from IQ Books yet: it goes through other MTD software or your accountant
- No payroll run: it records the journal your payroll provider gives you
- Emailing invoices from the app and automatic reminders are on paid plans
- Newer than the incumbents, with a much smaller app marketplace
Who it's for: Sole traders who want MTD-compliant bookkeeping without a monthly fee, and anyone who expects to become a limited company and would rather not change software when they do. More on why it exists in IQ Books: bookkeeping software built by a bookkeeper.
6. Other options worth knowing about
Pandle
Free Tier AvailablePandle offers genuinely free bookkeeping with a clean interface. The free tier covers basic record-keeping and MTD for VAT, though you'll need the Pro plan (£5/mo) for MTD ITSA features as they roll out. It's particularly good for very simple sole traders who want to keep costs at absolute zero. The paid tier adds bank feeds and more automation.
Wave
Wave is free accounting software from a Canadian company. It handles invoicing and basic bookkeeping well but has significant limitations for UK users: no direct MTD submission, limited UK bank feeds, and no payroll. It's a viable free option for sole traders under the MTD threshold who just want basic invoicing and record-keeping, but it won't scale.
Coconut
Coconut combines a business bank account with accounting software in one app. It automatically categorises transactions as you spend. The concept is elegant for sole traders who want everything in one place, though the feature set is narrower than standalone accounting software. Check their current MTD ITSA status on the HMRC list before committing.
Hammock
Hammock is specifically designed for landlords and property investors. If your sole trader income is primarily from property rental, Hammock's MTD ITSA support and property-specific features (mortgage tracking, tenant management, portfolio analysis) may suit you better than general-purpose accounting software.
Head-to-head comparison table
| Feature | FreeAgent | Xero | QuickBooks | Sage | IQ Books |
|---|---|---|---|---|---|
| Cheapest plan | Free (NatWest) or £19/mo | £7/mo (Simple) | £10/mo | Free (Sole Trader Free, capped) or £7/mo | Free |
| MTD ITSA | Yes | Yes | Yes | Yes | Quarterly updates (free); final declaration via other MTD software |
| Self Assessment filing | Yes | MTD final submission on Simple | Yes | Limited | No |
| Bank feeds | Yes | Yes (widest coverage) | Yes | Yes | Yes (open banking) |
| Payroll | Basic | Ignite £1.50/person; 1 included on Grow | Add-on £8/mo | From £20/mo (1 ee included) | Journals only |
| Multi-currency | Basic | From £55/mo | From £38/mo | £59/mo only | Included |
| App ecosystem | Small | Largest (1,000+) | Medium | Small | Small (suite built in) |
| CIS support | Yes | Yes | Yes | Yes | Yes (CIS300 filing paid) |
| Receipt scanning | Yes | Via Hubdoc (included) | Yes (built in) | Via AutoEntry (add-on) | Yes (built in) |
| Best for | NatWest/RBS customers, freelancers | Accountant-led, scaling businesses | Budget-conscious sole traders | Payroll, Sage 50 migrants | Free, MTD-ready books that can grow into a company |
All prices exclude VAT. Xero, Sage and IQ Books prices checked 9 October 2026, QuickBooks October 2026, FreeAgent March 2026. Prices change, so check each provider. Check each provider's website for current pricing.
Decision framework: 6 questions to ask yourself
Rather than arguing about which is the best sole trader accounting software in the abstract, work through these questions. Your answers will point to the right choice for your situation.
Do you bank with NatWest, RBS, or Mettle?
If yes, get FreeAgent. It's free, it's MTD-compliant, and it was built for people exactly like you. There is almost no scenario where paying for different software makes sense when you can get a full-featured product at no cost. The only exception is if your accountant insists on Xero, in which case that relationship is probably worth the £18/month.
Do you work with an accountant?
Ask them what they prefer. Most UK accountants work in Xero. Some prefer QuickBooks. A few still use Sage. Their preference matters because it affects how efficiently they can do your year-end work. If they charge by the hour, inefficient software costs you money in accountant fees even if the software itself is cheap.
Do you employ anyone?
If yes, compare what each includes. Sage Accounting includes one employee on Start and Standard (five on Plus) and charges £1.85 for each extra. Xero charges £1.50 per person on Ignite and includes one on Grow. QuickBooks charges £8/mo + £2 per employee. For one or two employees Sage is usually the cheapest way to have accounts and payroll in one place.
Is your budget under £15/month?
Xero Simple and Sage Sole Trader at £7/mo (both for the non-VAT-registered; Xero caps you at 10 invoices a month) and QuickBooks Sole Trader at £10/mo are the cheapest paid routes to full MTD ITSA. Pandle's paid tier at £5/mo is cheaper still. Below that, you're looking at HMRC's free tools or Wave, both with significant limitations.
Do you invoice international clients?
Multi-currency is expensive everywhere. QuickBooks Essentials (£38/mo) is the cheapest route. Xero requires the £55/mo Comprehensive plan. Sage locks it to £59/mo. FreeAgent has basic support but it's limited. If you regularly deal in USD, EUR, or other currencies, this feature alone may dictate your choice.
Are you likely to grow beyond sole trader?
If you plan to incorporate as a limited company, hire a team, or grow significantly, Xero is the safest long-term bet. It scales without migration. FreeAgent and QuickBooks handle limited companies too, but Xero's ecosystem and accountant adoption give it an edge for growing businesses. Avoid choosing software based on what you need today if you know your situation will change within a year. And if you do end up needing to move platforms, we wrote about why switching became this hard and how we collapsed it to one click.
What comes after: automating the bookkeeping
Whichever platform you choose, the software itself is only one layer. The real time sink for most sole traders isn't filing quarterly returns, it's the weekly grind of categorising bank transactions, matching invoices to payments, and making sure the VAT codes are right.
This is where bookkeeping automation tools sit on top of your accounting software and handle the repetitive work. Receipt scanners like Dext, Hubdoc, and PocketReceipt capture purchase invoices, PocketReceipt is free for sole traders with 10 AI scans per month, built around HMRC expense categories mapped to SA103F boxes, with mileage tracking at HMRC rates (55p/25p from April 2026) and CIS support. It exports CSV or PDF formatted for self-assessment, and accountants can manage multiple clients from a single dashboard. Bank rules auto-categorise recurring transactions. And tools like CodeIQ take it further, learning your chart of accounts, classifying transactions by meaning rather than keywords, handling VAT automatically, and posting everything back to Xero, QuickBooks, Sage, or Pandle. ReconcileIQ also builds its own UK bookkeeping software, IQ Booksso receipt capture, AI coding and reporting sit natively in one place rather than as bolt-on add-ons.
The combination matters. A sole trader using FreeAgent with automated bank categorisation spends perhaps ten minutes a week on bookkeeping. The same sole trader doing everything manually in the same software spends an hour or more. The platform choice sets the foundation; the automation layer determines how much of your life it actually consumes.
Reconciliation and analysis
Once your books are categorised, Bank Reconciler can reconcile your bank statement against your software records in seconds, catching discrepancies before they become HMRC problems. And LedgerIQ can analyse your general ledger data to surface financial insights, ratio analysis, and anomaly detection that basic sole trader software doesn't offer.
None of this replaces your accounting software. It's the layer that makes your accounting software work harder without you working harder.
The verdict
If you bank with NatWest, RBS, or Mettle: FreeAgent. It's free, it's MTD-ready, and it was built for you. Stop reading and go sign up.
If you work with an accountant who uses Xero: Xero Ignite at £18/month. The ecosystem and accountant efficiency are worth the cost.
If you want the cheapest paid option: Xero Simple at £7/month if you aren't VAT registered and send fewer than ten invoices a month; otherwise QuickBooks Sole Trader at £10/month, with Self Assessment filing and a clean interface.
If you employ people: Sage Accounting. Payroll in the same package, with one employee included on Start, is a genuine differentiator.
If you'd rather not choose between the incumbents: IQ Books is the UK bookkeeping software we build ourselves, and it's now open to every account. Where the others meter expenses, projects, or CIS as paid add-ons and raise prices most years, IQ Books includes the whole platform on every plan, AI transaction coding (CodeIQ), bank reconciliation (Bank Reconciler), 44 ledger analysis modules (LedgerIQ), year-end working papers (PrepIQ), and the RiQ copilot, all built in natively rather than bolted on. The free tier gives you one organisation with the full ledger, multi-currency and MTD filing included; paid plans start at £5/month and extra organisations are £2/month each. One-click migration pulls your opening trial balance, contacts, and outstanding invoices across from Xero, QuickBooks, or Sage, so trying it doesn't mean rebuilding your books by hand. It won't suit everyone, if your accountant insists on Xero, that relationship still wins, but for a sole trader who wants everything in one place without the add-on maths, it's worth a look. Explore IQ Books.
None of these is a bad choice. All of them will handle MTD ITSA. The differences are at the margins, and the margin that matters most is the one specific to your situation, your bank, your accountant, and your budget.
Pick the one that fits. Use the trial. Then stop agonising and get back to the work that actually earns you money.
Frequently Asked Questions
What is the best accounting software for a UK sole trader in 2026?
For most UK sole traders, FreeAgent is the best overall choice thanks to free access via NatWest, RBS, and Mettle, full MTD for Income Tax compliance, and a clean interface designed for non-accountants. If you bank elsewhere, Xero Ignite at £18/month offers the strongest ecosystem and accountant support. Xero Simple at £7/month and QuickBooks Sole Trader at £10/month are the cheapest paid routes to MTD for Income Tax.
Do sole traders need MTD-compatible software in 2026?
Yes, once your qualifying income crosses the threshold. If your self-employment and property income was over £50,000 in 2024 to 2025, Making Tax Digital for Income Tax applied from 6 April 2026; over £30,000 in 2025 to 2026, it applies from 6 April 2027; over £20,000 in 2026 to 2027, from 6 April 2028. You need HMRC-recognised software to keep digital records, submit quarterly updates and make your final declaration.
Can I use free accounting software as a UK sole trader?
Yes. FreeAgent is completely free for NatWest, RBS, and Mettle customers. IQ Books is free whoever you bank with, including the MTD quarterly updates. Sage Sole Trader Free costs nothing for the non-VAT-registered, with caps on invoices and transactions. Pandle offers a free tier with basic bookkeeping. Wave is free but limited for UK-specific needs. HMRC's software finder lists the free options it has recognised.
What is the best free MTD software for sole traders?
FreeAgent is free if you bank with NatWest, RBS or Mettle and covers the quarterly updates and Self Assessment. IQ Books is free whoever you bank with: its free plan keeps your digital records and sends your Income Tax quarterly updates and VAT returns to HMRC, with the final declaration submitted through other MTD software or by your accountant. Pandle has a free tier for basic bookkeeping and MTD for VAT.
What accounting software does HMRC recommend?
None. HMRC does not recommend any product or software provider. It publishes a list of software that has passed its recognition process for Making Tax Digital for Income Tax, with a finder that asks a few questions and narrows the list to what fits you. FreeAgent, Xero, QuickBooks, Sage and IQ Books are all on it.
Do sole traders need to use accounting software?
Only once Making Tax Digital for Income Tax applies to you: from April 2026 if your qualifying income is over £50,000, April 2027 over £30,000 and April 2028 over £20,000. Below that you can still keep paper or spreadsheet records for Self Assessment, although software makes the return far easier. Under MTD you can also keep a spreadsheet and send the quarterly updates with bridging software.
Is Sage Sole Trader really free?
Yes, within limits. Sage Sole Trader Free costs nothing and is Making Tax Digital ready, but it is for sole traders who are not VAT registered, connects one bank account, sends five sales invoices a month and auto-categorises 25 transactions. The paid Sole Trader plan removes those caps for £7 a month plus VAT.
Can I use QuickBooks as a sole trader?
Yes. QuickBooks has a plan built for sole traders, at £10 a month plus VAT, that keeps your digital records, sends the MTD quarterly updates and handles Self Assessment. It does not submit VAT returns, so a VAT-registered sole trader needs Simple Start or above.
What is bridging software for MTD?
Software that connects to the records you already keep, usually a spreadsheet, and sends them to HMRC. HMRC accepts it for Making Tax Digital for Income Tax: you keep the records digitally in the spreadsheet and the bridging product submits the quarterly updates. Some bridging products also submit the tax return.
What is the cheapest MTD-ready accounting software for sole traders?
FreeAgent is free if you bank with NatWest, RBS, or Mettle, IQ Books has a free plan, and Sage Sole Trader Free costs nothing within its caps. Among paid options, Xero Simple and Sage Sole Trader cost £7/month if you are not VAT registered (Xero allows 10 invoices a month), then QuickBooks Sole Trader at £10/month. Sage Accounting Start costs £20/month and Xero Ignite £18/month. All are HMRC-recognised for MTD for Income Tax.
Xero vs FreeAgent vs QuickBooks: which is best for sole traders?
FreeAgent is best if you bank with NatWest/RBS (free) or want the simplest interface. Xero is best if your accountant uses it or you need a wide app ecosystem. QuickBooks is best for budget-conscious sole traders who want solid features at the lowest price point (£10/month). All three handle MTD for Income Tax.
Is FreeAgent really free for NatWest customers?
Yes. NatWest, RBS, and Mettle (NatWest's business banking app) offer FreeAgent completely free to their business banking customers. This includes the full product with MTD filing, invoicing, expenses, and bank feeds. There is no time limit or reduced feature set. It remains free as long as you hold an eligible NatWest/RBS/Mettle account.
What is the best accounting app for a sole trader?
One that lets you do the everyday jobs from your phone: photograph receipts, raise and send invoices, and see what you are likely to owe in tax. FreeAgent, QuickBooks, Xero and Sage all have mobile apps that do this. Whichever you choose, check the same account files your Making Tax Digital quarterly updates, so the app and the desktop software are one set of records, not two.