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If you’re getting ready for Making Tax Digital (MTD), choosing the right software is one of the most important steps you can take.
However, with so many options available, some free, some paid, and some built for businesses, while others are for individuals, it’s not always clear which one is best for your situation.
This guide breaks down the key factors to consider, the most popular options, and how Cutter & Co can help you select the right package.
Prefer to talk it through? Book a free consultation to find out how MTD will impact your business and which software will work best for you.
To meet HMRC requirements for Making Tax Digital, your software must be recognised by HMRC and able to:
For the latest guidance on MTD software, you can visit Choose the right software for Making Tax Digital for Income Tax on the HMRC website.
However, beyond ticking these compliance boxes, the best software for you will also depend on:
At Cutter & Co, we’ve supported clients through every stage of Making Tax Digital since its launch in 2019. While we believe cloud software can save most businesses time and hassle, we also recognise that there’s no one-size-fits-all solution.
That’s why we work flexibly with all major MTD-compatible providers and help our clients choose the solution that best suits their needs, not ours.
If you’re unsure which software is best for your situation, please get in touch, and we’ll help you find the best fit for your business.
Making Tax Digital currently applies to VAT-registered businesses, but it’s being extended to cover Income Tax for self-employed individuals and landlords.
If you earn income through self-employment or property, you’ll need to follow MTD rules depending on your annual income:
If your income is below £20,000, you won’t need to follow MTD rules — for now.
Qualifying income includes gross income from self-employment and property before any tax allowances or expenses are deducted.
You’ll need to have compatible software in place before the deadline to start submitting quarterly updates. The sooner you’re set up, the more time you’ll have to get used to the system and avoid any last-minute stress.
For more information, visit our Making Tax Digital essential guide.
There are various HMRC-recognised software providers available for Making Tax Digital. Some are free, some are paid, and many are tailored to different needs.
HMRC does not recommend any one product or software provider. Likewise, Cutter & Co are not affiliated with any particular provider. However, we’ve supported clients through every stage of Making Tax Digital since its launch, and have experience working with all major MTD-compatible providers.
Based on our experience, we have outlined some of the most popular and widely used options below:
Sage is a long-established name in accounting, offering both desktop and cloud-based options with strong support and scalability.
Prices for sole traders start from £7 per month*
QuickBooks is a user-friendly choice for sole traders and small businesses. Offers automation features, mobile access, and easy bank syncing.
Prices for sole traders start from £10 per month*
Freeagent is relatively new, but it comes highly recommended for freelancers, contractors and growing businesses. Offers a clean interface and is free for some business bank customers (e.g. NatWest, RBS, Mettle).
Prices for sole traders start from £9.50 per month*
KashFlow is a simple, cloud-based platform with strong compliance features, especially for VAT and payroll.
Prices for sole traders start from £12 per month*
Xero is well suited for businesses that want strong reporting and integration with other tools. Popular with accountants and growing companies.
Prices for sole traders start from £7 per month*
The software options listed above are some of the most commonly used by sole traders and small businesses. But they’re not the only ones.
Many providers offer different packages tailored to your needs, for example, features designed for landlords, retail businesses, or those who require payroll and VAT support. Some include access to your accountant, mobile apps, or extra integrations to help automate your bookkeeping.
To find the right fit for your circumstances, you can speak with us, and we’ll help you weigh the pros and cons based on your business needs and future growth plans, or use HMRC’s software finder to explore all recognised options for Making Tax Digital.
Getting your software sorted is one of the most essential steps in preparing for Making Tax Digital, but it doesn’t need to be difficult.
This will also allow you to get used to any system changes prior to any deadlines.
At Cutter & Co, we believe switching over to cloud-based accounting will make your business more efficient, and moving over sooner rather than later will allow you to get used to any system changes before any deadlines.
Whether you already use accounting software or you’re starting from scratch, we can help you:
Book a free consultation to speak to our team and get expert support tailored to your business.
From April 2026, if your total self-employment and property income is over £50,000.
From April 2027, if your total self-employment and property income is over £30,000.
From April 2028, if your total self-employment and property income is over £20,000.
Yes. If your property income pushes your total income over £50,000 from April 2026, over £30,000 in April 2027 , and over £20,000 in April 20208, you’ll need to follow MTD rules.
Your income from both sources is added together. If the combined total is over £50,000 from April 2026, or £30,000 from 2027, or over £20,000 from April 20208, you’ll need to comply with MTD for Income Tax.
You can use spreadsheets, but they must be linked to HMRC-recognised software to submit your data digitally. Manual entry is no longer allowed for MTD submissions.
You’ll need HMRC-recognised software such as Xero, Sage, QuickBooks, or KashFlow. HMRC have a list of commercial software that works with Making Tax Digital. Cutter & Co can also help you choose and set it up.
If your income is over £50,000, you'll start submitting quarterly updates from April 2026. If your income is over £30,000, the start date is April 2027. If your income is over £20,000, the start date is April 2028.
Yes — but instead of one big return at the end of the year, you'll submit quarterly updates and then a final end-of-year declaration via MTD-compatible software.
You could face penalties or fines for non-compliance. HMRC plans to introduce a points-based penalty system for late submissions under MTD.
We’ll explain what MTD means for you, recommend the right software, help you get set up, and take care of submissions — so you can stay compliant without the stress. You can contact us to book a consultation.
*All prices are correct at the time of publishing (November 2025). Prices exclude VAT. These links are not affiliate links. Cutter & Co will always recommend the best software based on your individual circumstances.
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