How to choose the right software for Making Tax Digital (MTD)

If you run a small business, are a landlord, or a sole trader, choosing the right software for Making Tax Digital (MTD) is more than ticking a compliance box. The right tool can save you time, reduce stress, and give you a clear view of your finances.

We’ve looked at the main MTD-compatible software and compared their features, prices, and who they suit best.

The Big Three: Xero, QuickBooks, Sage

These are the most popular options for full accounting. Each works well for different types of business.

Xero

Best for: Businesses that want a scalable system with strong integrations

Pricing:

• Simple: £7/month
• Ignite: £16/month
• Grow: £37/month
• Comprehensive: £50/month
• Ultimate: £65/month

Xero works well if you want a full accounting system that can grow with your business. It handles bank feeds, invoicing, expenses, MTD reporting and has plenty of integrations for payroll, CRM, or inventory systems.

QuickBooks

Best for: Businesses that want easy to use software with good support and flexible reporting

Pricing:

• Self Employed: £12/month
• Simple Start: £16/month
• Essentials: £33/month
• Plus: £47/month
• Advanced: £115/month

QuickBooks is straightforward to set up and use. It gives you clear reporting, handles all the MTD requirements, and is backed by solid support if you need help

Sage

Best for: Sole traders or small businesses with basic accounting needs

Pricing:

• Start: £18/month
• Standard: £39/month
• Plus: £59/month

Sage is simple and predictable. It covers the essentials for bank feeds, invoicing, expenses, and MTD reporting without extra features. This makes it a good choice if you are starting out or want to keep costs low.

Other options for specific needs

Some businesses do not need a full accounting suite. Here are some alternatives.

FreeAgent

Best for: Small sole traders or landlords who want an easy setup

Pricing:

• Monthly: £29/month
• Annually: £290/year (~£24/month)
• RBS or Natwest customers: Free

FreeAgent works well for landlords and small businesses. It is easy to use, supports multiple income streams, handles MTD reporting, and lets you manage invoicing and expenses without complication.

QuickFile

Best for: Budget conscious clients who are comfortable with manual entry
Pricing:

• Free: Up to 1000 transactions
• Then: £60/year (~£5/month)
• Bank feeds: £15/year (~£1.25/month)

QuickFile gives you the essentials for MTD at very low cost. It works for invoicing, tracking expenses, and bank feeds if you are comfortable managing some things manually.

Hammock

Best for: Landlords who want property-specific compliance and dashboards

Pricing:

• 1-3 properties: £5.99/month + VAT
• 4-10 properties: £11.99/month + VAT
• 11-20 properties: £19.99/month + VAT
• 21+ properties: £41.60/month + VAT

Hammock focuses on property. It tracks rental income and expenses, handles MTD, and gives landlords dashboards for better oversight of their portfolio.

Feature comparison

How to decide

• Growing businesses with complex needs: Xero or QuickBooks
• Sole traders or smaller businesses with simpler needs: Sage or QuickFile
• Landlords or property-focused businesses: FreeAgent or Hammock
• Small businesses or sole traders wanting easy compliance: FreeAgent or QuickFile

Choosing the right MTD software is about matching the tool to your business type, the way you work, and your budget. The right software will save time, reduce errors, and give you confidence when reporting to HMRC.

If you’re unsure which option fits your business best, our team can help you make the right choice. We’ll guide you through the options, explain what works for your business type, and make sure you’re fully MTD-ready.

Get in touch today and take the guesswork out of MTD. Your business deserves clear, simple, and reliable accounting.