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Quick picks
- Best for sole tradersFreeAgent
- Best for growing firmsXero
- Good all-rounderQuickBooks
- Established UK nameSage Accounting
Making Tax Digital for Income Tax means many self-employed tradespeople now need software that keeps digital records and sends quarterly updates to HMRC. Here's who needs it, when, and the best options.
What to look for
- Check your start date. From 6 April 2026 it applies above £50,000 qualifying income. From April 2027 the threshold drops to £30,000, and the plan is £20,000 from April 2028.
- It's turnover, not profit. The threshold uses your gross income from self-employment and property, before expenses.
- HMRC-recognised. Make sure the software is recognised for MTD for Income Tax.
- Receipt capture. Snap receipts for materials and fuel on your phone.
- Bank feeds. Automatic bank feeds save hours of typing.
Side by side
| Pick | Software | Best for | Weak spot | Price band |
|---|---|---|---|---|
| FreeAgent | FreeAgent | Sole traders | Less suited to bigger firms | ££ |
| Xero | Xero | Growing firms, ltd companies | Can feel complex at first | ££ |
| QuickBooks | QuickBooks | Sole traders and small firms | Prices rise after offers | ££ |
| Sage Accounting | Sage | Traditional bookkeeping | Interface feels dated to some | ££ |
FreeAgent
Simple · MTD · tax estimates
Built for freelancers and sole traders, with clear tax estimates. Often free with certain business bank accounts, such as Mettle and NatWest.
Good
- Very easy to use
- Shows what tax you'll owe
- Often free with a bank account
Not so good
- Less powerful for limited companies with staff
Xero
Powerful · huge app marketplace
The one many accountants prefer. Connects to almost every trade job app.
Good
- Accountants know it
- Integrates with Tradify, Fergus and more
Not so good
- More than a simple sole trader needs
QuickBooks
MTD · mileage · receipts
A solid all-rounder with useful mileage tracking and receipt capture.
Good
- Mileage tracking
- Strong mobile app
Not so good
- Watch the price after intro offers
Sage Accounting
MTD · invoicing
A long-standing UK name with MTD covered and plenty of accountant support.
Good
- Well known in the UK
- Accountant support
Not so good
- Interface is less modern
Quick answers
Do I need MTD software if I earn under £30,000?
Not yet under current plans. The threshold is £50,000 from April 2026 and £30,000 from April 2027, with £20,000 planned from April 2028.
I'm employed with a bit of side work. Does MTD apply?
It's based on self-employment and property income only, not your PAYE wage.
Can I keep using spreadsheets?
Only with bridging software that submits to HMRC. Most people find proper accounting software easier.
Verdict
FreeAgent for most sole traders, especially if it's free with your bank. Xero once you grow or go limited.