Is there free MTD software available in the UK?
Yes. Free MTD-compatible options include QuickFile, My Tax Digital, FreeAgent (free via NatWest, Mettle, or Lloyds business accounts), Clear Books (free tier), and AccountsOS (free during Early Access).
Detailed Explanation
Several free software options are available that meet HMRC's Making Tax Digital requirements. You do not need to pay for software to comply with MTD.
Completely free MTD software: - QuickFile — free cloud accounting for small businesses, supports MTD for VAT and MTD for ITSA - My Tax Digital — free bridging software that lets you submit from spreadsheets - Clear Books — offers a free tier with basic MTD functionality - AccountsOS — free during Early Access, AI-native bookkeeping with chat interface and MTD compatibility
Free via bank partnerships: - FreeAgent — normally £14.50/month, but completely free if you hold a business account with NatWest, Mettle, or Lloyds. Check with your bank.
Bridging software (for spreadsheet users): If you prefer to keep your records in Excel or Google Sheets, bridging software reads your data and submits it to HMRC in the correct format. My Tax Digital offers this for free.
All software used for MTD must appear on HMRC's official approved list. Check [HMRC's software list](https://www.gov.uk/guidance/find-software-thats-compatible-with-making-tax-digital-for-income-tax) before choosing.
Important: "Free" does not mean "basic." Several of these options offer full bookkeeping, invoicing, and reporting alongside MTD compliance.
Source: HMRC MTD Compatible Software List
Real-World Examples
NatWest Business Customer
You have a NatWest business account and earn £52,000 from self-employment. FreeAgent is completely free for you — sign up through NatWest's partnership page and link your MTD submission.
Excel Devotee
You have tracked income and expenses in Excel for 15 years and do not want to change. My Tax Digital is a free bridging tool that reads your spreadsheet and submits quarterly updates to HMRC.
Landlord Wanting AI Help
You manage rental properties and want to ask questions like "what's my rental yield?" or "when is my next quarterly submission?" in plain English. AccountsOS is free during Early Access and supports MTD.
Common Mistakes to Avoid
- Assuming you must pay for software to comply with MTD — several free options exist.
- Not checking whether your bank offers free accounting software through a partnership deal.
- Using software that is not on HMRC's approved list — always verify before submitting.
- Overlooking bridging software as an option if you prefer spreadsheets.
Frequently Asked Questions
Is free software as good as paid software?
For MTD compliance, yes. Free software submits to HMRC in exactly the same way as paid software. Paid options may offer additional features like advanced reporting, multi-currency support, or payroll.
Will free software always stay free?
This varies by provider. QuickFile has been free for over a decade. Bank partnerships (FreeAgent via NatWest) depend on the bank maintaining the deal. AccountsOS is free during Early Access with plans starting at £9/month for early adopters.
Can I use free software if I have an accountant?
Yes. Most free MTD software allows you to invite your accountant as a collaborator. Your accountant can review your records and submit on your behalf if needed.
Do I need separate software for MTD VAT and MTD ITSA?
Not necessarily. Many tools (QuickFile, FreeAgent, Xero) support both. Check that your chosen software handles both MTD for VAT and MTD for ITSA if you need both.
Practical Tips
- Start with a free option and upgrade only if you need features like payroll, multi-currency, or advanced reporting.
- If you have a NatWest, Mettle, or Lloyds business account, check if FreeAgent is included free before paying for another tool.
- Test your chosen software with a dummy submission before your first real quarterly deadline.
- Remember that "free during Early Access" means the pricing may change — check the provider's roadmap.
Related Questions
What software is compatible with Making Tax Digital?
MTD-compatible software must be on HMRC's approved list. Free options include QuickFile, My Tax Digital, FreeAgent (via NatWest/Mettle), and AccountsOS. Paid options include Xero, QuickBooks, and Sage.
Do I need accounting software for Making Tax Digital?
Yes, if you're VAT-registered you must already use MTD-compatible software. From April 2026, self-employed and landlords earning over £50,000 must also use MTD-compatible software for Income Tax.
When does Making Tax Digital for Income Tax start?
MTD for Income Tax Self Assessment starts in April 2026 for those with qualifying income over £50,000, April 2027 for £30,000+, and April 2028 for £20,000+.
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