Compare software for Making Tax Digital for Income Tax

What software is available for MTD for Income Tax? What's the cheapest software I can use for MTD for Income Tax? What is the best value software that I can use? What to consider before choosing software? 

This is a freeview 'At a glance' guide to software for Making Tax Digital (MTD) for Income Tax.

At a glance

• This guide compares the pricing and capabilities of software that will enable you to keep digital records and send quarterly updates to HMRC to comply with Making Tax Digital (MTD) for Income Tax requirements. 
• Making Tax Digital for Income Tax is currently voluntary. It will become mandatory from 6 April 2026 in phases based on your total annual income from self-employment or property. See Making Tax Digital: Index & timeline.
• This change comes at quite a cost as it means that many business owners will need to start preparing their bookkeeping in real-time, as opposed to handing their accountant or bookkeeper a large bag of receipts at the end of each year.
• Digital records containing 'Update information' must be filed with HMRC quarterly, followed by a year-end final declaration statement. Taxpayers volunteering to use MTD for Income Tax must submit a Self Assessment tax return. 

As of 4 February 2025, 13 companies are listed by HMRC as compatible with MTD for Income Tax. There are other companies listed as having software in development.

*Under MTD for Income Tax taxpayers are required to submit quarterly updates and their Digital Self Assessment Tax Return (including a final declaration). See, MTD: Toolkit for accountants. Not all software supports both quaterly updates and submission of the Digital Self Assessment Tax Return (including a final declaration).

It is optional for taxpayers to join the MTD pilot scheme: you can still use the software without taking part in the pilot.

Types of software 

• There are three main types of software:
  • Software packages: Allows taxpayers to keep digital records and file returns to HMRC. 
  • Application Programming Interface (API) spreadsheets: These spreadsheets have an inbuilt function allowing them to file returns via HMRC's (API). 
  • Bridging software: Allows taxpayers to use spreadsheets to store digital records, which are then digitally linked to the bridging software, before being submitted to HMRC. HMRC's guidance explains How to digitally link your software. 

What to consider before choosing software? 

Several points need to be considered before choosing software, some key points include: 

• How will the records be kept? 
  • How will the business income and expenses be tracked?
  • Some software allows digital records to be created by manually entering data or by connecting it to an online business account or data capture. 
  • Alternatively bridging software can be used with existing spreadsheets or accounting software to create and submit your digital records. 
• Does the accounting period align with the tax year?
  • Where an accounting period runs from 1 April to 31 March taxpayers may choose to use calendar update periods. Some software providers do not support calendar update periods. 
• What are the sources of income?
  • Some software is only able to submit specific sources.

Useful guides on this topic

Making Tax Digital: Index & timeline
When does Making Tax Digital (MTD) apply? What does Making Tax Digital really mean? How will it affect you? Does MTD mean quarterly reporting? Is my business exempted from Making Tax Digital?

Making Tax Digital for Income Tax: Data required by HMRC
What information do you need to submit under Making Tax Digital for Income Tax? What are the requirements for relevant persons under the VAT threshold? What are the categories of information required?

MTD: Toolkit for accountants
What is the current timetable for Making Tax Digital? How will it work? Which clients will be excluded? What planning needs to be undertaken?  

Making Tax Digital: Survival guide (for the self-employed & landlords)
This is a freeview factsheet for the many self-employed taxpayers, company owners and property landlords who are unaware of HM Revenue and Custom's radical plans to transform the tax online filing system. 

MTD: Income Tax Pilot Tool
Making Tax Digital (MTD) for Income Tax. Are you eligible to take part in the MTD Pilot?

Making Tax Digital: Pricing for Accountants
How much can you charge? How much should you charge?

External Links 

Compatible for Making Tax Digital for Income Tax.