UK-based freelancers, sole traders, and landlords are required from April 2026 to adhere to new tax submission requirements. Making Tax Digital (MTD) requires self-employed UK residents to submit quarterly records, with record-keeping maintained using HMRC-approved software.
Conceived as a means to improve accuracy and efficiency, MTD does not apply to freelancers operating a limited company, but does apply to any freelancer, sole trader, or landlord with a turnover exceeding £50,000. This reduces to £30,000 in 2027.
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To deal with these new tax requirements, MTD-compatible software is required. His Majesty’s Revenue and Customs (HMRC) has issued certification for suitable tools. Many existing accountancy applications are compatible with MTD, along with a collection of free tools, many of which are published by recognizable names within the financial software market.
Sage Sole Trader Free
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Sage is probably the biggest name in UK accounting software over the past 4 decades, created in 1981 in Newcastle upon Tyne, UK, by David Goldman, Graham Wylie, and Paul Muller. Initially released as a disk-based financial application, Sage has more recently switched to a cloud-based provision.
Various versions of Sage are available, and it now covers everything from accounting and payroll to HR. This pedigree makes it an ideal choice for anyone looking for an MTD solution, and Sage Sole Trader Free is designed to fit the bill.
With the tool, you can prepare your MTD submission in advance, connect a bank account, and there is also a free mobile app. Sole Trader Free will give you 5 sales invoices per month and 25 AI-supported, automatically categorized transactions, all of which should keep everything streamlined and ready for MTD. But if you need more invoices, more AI-assisted transaction categorization, more bank accounts, or support, there is the Sole Trader paid tier.
This is relatively affordable compared with other premium accounting tools, costing just £7/month (plus VAT), but there is the option to get the first 3 months for free, which might suit your pocket in the lead up to the first MTD submission on August 7 2026.
Where Sage Sole Trader Free might disappoint is in its lack of reports. Beyond the SA103 Short report, nothing is available, again leaving you with the only choice but to upgrade from Sole Trader Free to Sole Trader.
GoFile
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Founded in 2017 and now used by over 50,000 businesses (according to 2024 figures), GoFile started life as “1 Click Accounts”, gaining a name change in 2021 following its support for MTD for VAT, with the rollout of MTD for Income.
Another factor to note is that apart from Sage Sole Trader Free, GoFile offers far more in terms of depth and complexity than any of the alternatives listed here. As such, you may find the wealth of options – reports, advanced sales and purchasing tools – to offer more than you need. Tax Self Assessment, GoFile has a friendly user interface with clear objectives.
All of this is accessible via a Google account or a standard email and offers perhaps the simplest setup of all tools in this list. However, while it is suitable for sole traders, freelancers, landlords, and even limited companies, GoFile’s free tier extends as far as submission day. Once you hit the MTD filing, you’re looking at a £49.99 annual bill (or £4.99/month).
Free MTD software doesn’t necessarily mean free submission, and GoFile is the same. The software provides everything you need to set up your business, update income and expenditure, and calculate taxes. But that’s where “free” ends, although there is a 30-day free trial of the software’s higher tier.
But perhaps the best aspect of GoFile is its sandbox mode. This is available from the moment you sign in, and lets you play around with figures and fake filings, with no connection to HMRC. It’s a useful feature that lets you get a better grip on concepts like capital gains and reliefs and losses, so it’s worth spending time with.
TaxHeaven
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With an aim of “making tax heavenly for UK sole traders and landlords,” TaxHeaven offers a pair of options. Angel, the free option, is fully MTD compliant, and along with a few AI enhancements (which are extended with the premium Archangel plan for £49/year), gives you automated bookkeeping and submissions for a single business. Additional businesses require manual entry.
TaxHeaven was built by Raunaq Bose and founded in 2025 with the primary aim of simplifying Making Tax Digital for sole traders, landlords, and freelancers. In early 2026, TaxHeaven partnered with the Yapily banking platform to bring automation to syncing transactions with bank accounts.
Getting started with TaxHeaven requires either a Google login or your own email address, which takes you straight into a clear and modern user interface. Banking data can be imported, income and expenses input and saved, and the app is at pains to highlight that nothing is shared with HMRC until you hit the submit button. I found the import tool required a bit of messing around with the source data before needing to match fields, however, so be prepared.
Furthermore, data can be easily exported as PDF reports or CSV data, should you require its use in another accounting tool. Once authorized with HMRC (via a registration feature within the TaxHeaven cloud app), you can submit quarterly MTD returns. However, actual submission tools were not available at the time of writing – instead, the app states that “quarterly submission tools will be ready ahead of the 5 August deadline.” As such, the app encourages the recording of income and expenses, rather than the distraction of submitting.
ANNA Self Assessment
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Requiring a simple Google authorization registration and login, ANNA Self Assessment is a handy, clearly laid out accounting tool that runs in the cloud.
Standing for “Absolutely No Nonsense Admin,” ANNA was founded in 2017 and offers several financial tools.
It is important to be clear on how free this software is, however. You’ll get basic accounting tools (bank connection, profit/loss, etc.) and, as a sole trader or landlord, will receive access to free MTD submissions. However, ANNA’s chatbot explains that this is related to the +Taxes add-on, which is a paid service for limited companies; additionally, there is no clear MTD functionality within ANNA Self Assessment at the time of writing.
Instead, this seems to be something that will be added to the free tier at some point between now and the first submission date (August 7, 2026). You can still input your incomings and outgoings, and connect to your bank account, but with this slow roll-out in mind, you might prefer to opt for one of the alternatives.
But for a free tool, ANNA Self Assessment has a lot to offer. It gives you invoicing and photographic receipt upload tools, integration with other software like Xero, and supports SWIFT and CHAPS transfers and payments.
The very useful Terrapin tax chatbot is another excellent feature of the free plan, and can clarify everything tax-related. If you need to upgrade for more functionality as your business expands, the basic Business plan is £22.90/month, although note that expansion might also require you to pay for the +Taxes add-on.
Clear Books Free
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A UK-based accounting software publisher, Clear Books has been running since 2008, and aims to publish “clear & simple cloud accounting and payroll software” for UK-based small businesses. Recently, it has added “AI automated accounting” as its website tagline (or slogan), and according to its LinkedIn page, serves around 15,000 businesses across the UK. This comprises “accountants, bookkeepers, and small businesses.”
Signing up to Clear Books is straightforward, requiring only your email address. There is no facility to use Google, Apple, or Facebook to register, which at least means you can keep control over your own data. The AI element of Clear Books appears to be assisted, rather than autonomous, so it may suggest account codes, for example, but the user can override everything if necessary.
Clear Books Free has limited features, but includes everything you need to get your MTD submission completed and sent online each quarter. It has an export tool, too, and custom account codes, if required. On the downside, however, the interface is pretty drab, with the feel of a 2000s Microsoft app. But as it is a free-to-use cloud accounting tool, you may feel able to overlook that.
Entering income is straightforward, but limited by manual input of everything; with the Clear Books Free package, there is no automation of bank feeds or invoicing. As well as taking care to accurately enter data, it’s important to remember to click Save. The relatively basic interface of Clear Books doesn’t position the Save button in an intuitive way.
Beyond this, Clear Books Free is a useful way to get started with some no-nonsense software and polish your MTD submissions ahead of sending to HMRC at the end of each quarter.
If you need additional features from Clear Books, it also offers a “sole trader” subscription for just £5 a month. This includes support for unlimited bank feeds, as well as PDF and photographed receipt uploads, along with customizable sales invoices and telephone support.
!Coconut Free
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Founded in 2016 and launching its first app in 2018, !Coconut is a British company that entered the financial software market by targeting sole traders before progressing to limited companies. Its software – mobile and cloud apps – have proven popular, and the company was acquired by GoSimpleTax in 2023 to offer a more complete option for sole traders, landlords, and the self-employed facing MTD rules.
!Coconut Free gives you tools to manage your MTD submission, enabling bank connection so transactions can be recorded, bulk receipt upload, invoice generation, and reports. Overall, everything is straightforward, and the interface guides you through setup with a handy checklist. This covers linking your bank account, adding contacts for invoices, and concludes with checking items in your bank account to ensure they’re correctly attributed to the correct category code. You’re also encouraged to use the mobile app. This features some easy “glanceable” screens, where important information is usefully highlighted – things like the current month’s profit/loss, and the current tax situation.
However, while we’re impressed with !Coconut Free, it isn’t quite ready for MTD at this time. The MTD ITSA screen within the web app states, “MTD ITSA is coming in April 2026 for the 2026/27 tax year. This will apply for those who earn (income, not profit) over £50,000 of self-employed or property per year.” However, there is not yet any functionality for this feature. Instead, reference is made to the 2025/26 beta program, which implies testing has been ongoing but hasn’t yet moved to providing the MTD portal for users.
But as we’re still close to the end of the 2025/26 tax year, this is probably something that will be implemented soon – certainly in readiness for the August 7 deadline.
Note that !Coconut Free isn’t entirely free. With a Zempler business bank account, you get the software free for 2 years, but for everyone else, a 14-day trial is available ahead of a £129.99 annual payment (or £21.99/month).
FreeAgent
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FreeAgent has been supporting MTD for VAT since its implementation in 2022, and is now rolling out support for MTD for Income Tax Self Assessment ahead of the first submission date on August 7 2026.
Launched in 2007, FreeAgent was acquired by the Royal Bank of Scotland Group (now known as the NatWest Group) in 2018. This has had an impact on its availability.
Like !Coconut, FreeAgent offers the software for free only to business bank account holders. The choice is wider, however. If you have a NatWest, Royal Bank of Scotland, Ulster Bank, or Mettle business account, you can enjoy FreeAgent and its MTD submissions for free. Otherwise, as a sole trader, you’re looking at £190/year or £19/month, although these prices are often discounted and come with a 30-day trial.
Setup and day-to-day use of FreeAgent is frictionless, with the opportunity to create invoices, sync business bank accounts (third-party banks are supported), and record expenses. Financial data is clearly presented in the main screen, and there is a section for taxes. This is where the connection with HMRC is established, ready for the quarterly MTD submissions and annual declarations under the new tax rules.
This is straightforward accounting software, and if you have the appropriate prerequisite bank account, it’s a great free option for Making Tax Digital.
Alternative MTD tools with free options
As the accounting software industry races towards August 7, an increasing number of free MTD submission apps are either being released or optimizing their existing features to attract new businesses.
If you’re caught in the MTD bracket, then the solutions listed above should work out well for you. However, we’ve also looked at some other tools:
- My Tax Digital is a self-described “a tax portal that allows businesses, sole traders, landlords, tax agents and accountants to meet HMRC’s Making Tax Digital (MTD) requirements.” This means it isn’t a full calculation tool, as with other software in this list, but enables easy MTD submission.
- Acxite: Features everything you need to get your submission ready, but you only get full functionality with Google Chrome and Microsoft Edge browsers.
- Monzo: Much like its domestic bank accounts, Monzo Business offers useful additional tools to help you better control your finances. One such tool is Sage-powered HMRC-recognised MTD software, available free if you have a Monzo Business account.
- QuickFile: Straightforward invoicing, although it offers far more in terms of depth and complexity than any of the alternatives listed here.
Free MTD software FAQs
What is MTD for Income Tax Self Assessment (ITSA)?
Usually shortened to “MTD for Income Tax” or simply “MTD,” this is a UK government initiative that requires freelancers, the self-employed, and landlords making over £50,000 to maintain digital records. In addition, quarterly updates must be submitted to HMRC, along with an annual final report and declaration.
Why do freelancers need MTD software?
Launching on April 6, 2026, Making Tax Digital is designed to make Income Tax Self Assessment easy for freelancers, sole-traders, and landlords, where the annual turnover exceeds £50,000.
Using MTD software, digital records must be made and maintained, tracking income and spending, whether on expenses or otherwise, with quarterly submissions made ahead of the annual declaration. Existing accounting tools can be used to make quarterly MTD submissions, as these should support the new tax declaration environment. But if you don’t already use an accounting tool (perhaps you rely on an annual chat with an accountant to manage your paperwork) then a free application that handles MTD might be attractive.
These tools feature an easy setup process that connects to your self assessment portal via the Government Gateway, meeting the same technical requirements as the more expensive, all-encompassing paid accountancy applications.
Simultaneously, MTD software connects to a specified business bank account. These two links ups – each via APIs (Application Programming Interface) supported by the MTD software – enables easy record keeping of money in and money out. MTD-compatible mobile apps, meanwhile, give you the option of updating and reviewing income and expenditure on the go. In fact, where mobile apps are used, there is event the option of sending the quarterly submissions wherever you are.
Using MTD software means that you first need to ensure that you are registered for MTD through the Government Gateway. Once that is done, the tools can be connected to your HMRC account via various means, although they usually do this via your National Insurance (NI) number.
We’ve tested the following free MTD tools, with all 10 free to use for Making Tax Digital, although one is a paid tool with a generous free trial.
When does MTD for self assessment start?
The new Making Tax Digital quarterly assessment begins in the tax year commencing April 6, 2026. This means that the first submission is due by August 7 2026, which will cover the quarter running from April 6 2026 to July 5 2026.
Following this, the deadlines are November 7 2026, February 7 2027, and May 7 2027, with the final declaration for that tax year due January 31, 2028.
Who needs to use MTD?
Initially, any sole trader, freelancer, or landlord with an annual turnover of £50,000 is required to use MTD (turnover being the total income your business generates) from April 2026. This figure reduces to £30,000 from April 2027, and is currently expected to drop further to £20,000 by April 2028.
What is MTD software?
MTD compatible software is designed for simple Making Tax Digital submissions. It is recognized by HMRC and facilitates easier online submissions.
Set up is straightforward, typically requiring linking up with your business banking account and the HMRC website. Most MTD software is browser-based, so no download is required, although some offer mobile apps for portable convenience.
How do I choose the right MTD software?
Whether you’re looking for a free tool or are happy to use whatever MTD software you can find, it needs to fulfill several requirements.
Because most paid solutions already include MTD support, if you’re already using a subscription-based cloud accounting app, you probably don’t need dedicated MTD software.
But if you’re new to this, or looking for something new, your MTD software should have:
• Sole trader features – this might be just the minimum features you need for submission, and that’s okay. However, look for software that lets you track your tax position throughout the year, as this will prove invaluable in the new world of MTD
• Income sources – if you have multiple clients as a freelancer, this will need to be accommodated. If you have both self-employment and property income as a landlord, support for multiple income sources will also be required.
• Digital record keeping – still keeping track of income and expenses on paper? MTD requires digital-only submission, which means keeping records electronically from now on.
• Submission portal connection – MTD is an online submission, so your MTD software should be able to connect to HMRC. You’ll need to register for MTD and provide your NI number in the software (along with other credentials) in order to use the online submission.
Note that some of the free MTD submission applications in our recommended list may not be 100% free long-term. Some feature a free trial, while others have strict limits on what you can and cannot submit. While there is almost certainly a free MTD tool to suit your requirements, some trial and error may be required. But as you don’t need to submit anything until the next quarter, you should have time to experiment.
Is MTD for limited companies or partnerships?
Limited companies are not affected by Making Tax Digital. So, even if you are a freelancer, if you operate as a limited company, then you stick with the existing tax arrangements.
Partnerships are also exempt unless they are VAT registered, in which case rules concerning MTD for VAT should be adhered to.
As such, only freelancers, self-employed, and landlords with a turnover over £50,000 per year are required to use MTD.
Is MTD software free?
Many free MTD software tools are available, most of which are listed above. The free tools or free plans from popular accounting software subscription services typically offer limited functionality or transaction limits compared with paid alternatives.
But if your income is regular, from a narrow collection of sources (e.g., retail, regular clients), then you should be able to satisfy the quarterly and annual MTD requirements without paying for additional software.
However, you should be aware of the time required to input your data. If your chosen MTD software is compatible with bank feeds, that will save a lot of time. Otherwise, you’re looking at a minimum of 2 to 3 hours of data entry to satisfy HMRC’s requirements each quarter.
Is MTD based on turnover or profit?
MTD submissions are based on your turnover (that’s the gross) rather than profit. So, the total gross income from self-employment or property rental before any deduction for expenses. Even if the net profit is low, if your turnover is £50,000 or more, you must comply with the MTD rules.
Is MTD replacing self assessment?
Rather than replace self assessment for income tax, MTD changes the responsibilities of a sole trader, freelancer, or landlord. Digital records must be kept, with the quarterly submissions and a final declaration replacing the annual tax return. The deadline for paying your tax bill has not changed (January 31).
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